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Be Sure Not to Overlook These Items on a Final-Walkthrough

home inspection final walkthrough

[tweetmeme] It is an exciting time when everyone is ready to finally close the deal on your new home.

It’s guaranteed to be hectic 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.

Make sure that:

* Repairs you’ve requested have been made. Obtain copies of paid bills and warranties.
* There are no major changes to the property since you last viewed it.
* All items that were included in the sale price — draperies, lighting fixtures, etc. — are still there.
* Screens and storm windows are in place or stored.
* All appliances are operating, such as the dishwasher, washer and dryer, oven, etc.
* Intercom, doorbell, and alarm are operational.
* Hot water heater is working.
* No plants or shrubs have been removed from the yard.
* Heating and air conditioning system is working
* Garage door opener and other remotes are available.
* Instruction books and warranties on appliances and fixtures are available.
* All personal items of the sellers and all debris have been removed. Check the basement, attic, and every room, closet, and crawlspace.

Although you’re feeling the emotions and excitement of moving into your new home, be sure to stay diligent before the deal is sealed.  If something doesn’t seem right or you have additional questions, be sure to get them addressed.  You don’t want to be left with a costly issue after you move into your house, especially when it could have been taken care of before the close of escrow.

Investing in a home can be overwhelming.  There are many important factors to consider.  The best way to feel more confident during the home buying process is to gain the necessary knowledge.  Attend a real estate seminar in your local area.

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How to Partner with Sellers to Make More Money

real estate partnerships

One of the most exciting advantage of real estate investing is the number of creative ways to make a transaction or a “real estate deal” lucrative for you and, better yet, for all parties involved.

The important questions to ask yourself before jumping in:
1. How creative are you?
2. How bad do you need the deal?
3. How motivated are your Sellers to sell?

Your goal here is to partner with the seller, assume control of the property and quickly resell the home for a large profit.

Below are important criteria for partnering with sellers on real estate deals:

Home requirements:  The property can be a mobile home or traditional site built home.  The property should have considerable equity (pull comparables in the area).  This technique works best with more desirable homes.  Perhaps the seller has not even marketed the home to properly attract buyers.  The property may have cosmetic eye sores.  Avoid homes that will require costly repairs, extensive curb appealing improvements, code violations, or other money pits.  The property may or may not have a preexisting mortgage.  Look for homes that you believe are just a few inexpensive fixes away from a retail sale.

Seller requirements: The sellers are very motivated to sell, but know the value of their home and demand a fair price.  Sellers will not have the liquid cash to cover the repair costs needed for a fast sale.  Owners may be living out of state.  The preexisting mortgage(s) or late payments may be in default, this could be a reason for the fast sale.  The sellers may NOT continue living in the property once you agree to help.  Sellers must be willing to wait until you re-sell the property for their payday.

The Process: Once you have established that the seller and property are good candidates for partnering, you must have a meeting of the minds.  A specific contract should be created to explain which parties will be responsible for which costs, how profits will be divided and how you will be compensated for your time and experience.  Due diligence should be performed before adding yourself to ANY property deed. Align yourself with a good title company that can research title for you.

I advise using a Warranty Deed to place the home into Land Trust or Personal Property Trust prior to adding yourself as equitable owner.  Using a Trust will not cause seasoning issues later down the road when your buyer is attempting to locate conventional financing.  It is important that you, or your trustee, are named on the deed before you place any money into the home or start marketing the home for sale.

At this point you should have only spent a minor amount of money adding yourself to the chain of title.  The sellers should be moved out of the home by now.  Bring the past due mortgage(s) current to insure the home does not slide into foreclosure while you are trying to sell it (try to split this cost with the sellers).  Remove, replace, and repair any cosmetic damages that may detour a potential buyer to pass on this property.  Spend a few hundred dollars increasing curb appeal, hire a Realtor, and start marketing the property for sale by yourself.

One important thing to remember is, by adding yourself as part owner you are not mistaking yourself as a Real Estate Agent and practicing without a license.  When writing up a partnering agreement always remember to clearly state that; YOU will be reimbursed for ALL expenses you made to property, etc. This total expense will be paid to you from the NET profit of the sale.  Only after you have been repaid all monies you have spent on the property, will this new total NET profit amount be split with your seller in any percentage you have previously negotiated.

Even good properties can make you money .  If you can risk only a few dollars to make thousands, how many many of these deals would you do?  Partnering with sellers allows you to control more properties without spending a large amount of cash to do so.

Source:  John Fedro (specializes in investing in mobile and manufactured homes)

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Taxpayers Must File a Paper 2009 Tax Return

file taxes for 2009

Legislative changes in November 2009 expanded and extended the credit and also added documentation requirements for claiming the credit. Due to increased compliance checks by the IRS, failure to submit documentation will slow down the issuance of any applicable refund.

2009 Tax Return

Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Home Buyer Credit and Repayment of the Credit (see the instructions for help with the form), and a properly executed copy of a settlement statement used to complete the purchase.

  • Purchasers of conventional homes should include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties’ names, property address, sales price and date of purchase.
  • Purchasers of mobile homes who are unable to get a settlement statement should include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price and date of purchase.
  • Purchasers of newly constructed homes where a settlement statement is not available should include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Note Regarding Signatures: While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS recognizes that the elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and seller. The settlement statement that must be attached to the return is considered to be properly executed if it is complete and valid according to local law. In locations where signatures are not required the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return even in cases where the settlement form does not include a signature line.

Long-Time Residents: The November 2009 legislation extends the credit to long-time residents of the same main home if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period:

  • Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
  • Property tax records or
  • Homeowner’s insurance records.

Source: IRS (First-Time Homebuyer Credit)

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New Tax Breaks to Stimulate the Economy

tax credits

Taxes are more complicated than usual with all the new deductions and credits created last year to stimulate the economy. And in some instances, Congress went back to revise and expand the tax breaks. The popular home buyer credit, for instance, is on its third version.

“You can’t just sit down with last year’s return and make sure you fill in the same lines and think you got everything coming to you,” says Harris Abrams, a senior tax analyst with Thomson Reuter’s Tax & Accounting.

Fortunately, many of the new tax breaks are credits, which are better than a deduction because they reduce your bottom-line tax bill dollar-for-dollar.

So before you fill out your return, here’s a refresher on some of the key tax breaks this season:

Donations to Haiti
If you made a charitable donation for earthquake relief in Haiti, you can deduct it on your 2009 itemized return instead of waiting until next year. This applies to cash gifts—not clothes or other property—made by check, text message or credit cards before March 1, 2010. As usual, donations must go to qualified charities, and you’ll need a receipt. For donations made via text message, a phone bill with the name of the charity and details of the gift will suffice.  More info on

Making work pay credit
This credit is worth up to $400 a year for singles and $800 for joint filers within certain income limits. It was designed to put money quickly into consumers’ hands by having employers reduce the amount of taxes withheld in paychecks.

**Even though you got some or all of the money last year, you will need to fill out the new Schedule M if filing a Form 1040 or 1040A to officially claim the credit.

That said, more than 15 million taxpayers are in for an ugly surprise, according to an estimate by the Treasury Inspector General for Tax Administration. Their refunds may be reduced or they might owe more in taxes because their employers wound up taking out too little for taxes. This can happen to workers with multiple jobs, two-income couples or dependents with wages, says Melissa Labant, technical manager for the American Institute of Certified Public Accountants. Something similar can happen to workers with multiple employers reducing withholdings, Labant says. And dependents don’t qualify for the credit, so they may have to make up for a shortfall in tax withholdings, she says. The Making Work Pay credit is in effect for this year, too. If you didn’t have enough taxes withheld last year, adjust your W-4 now so your employer increases your tax withholdings.  More info on

Home buyer credit
Originally, the $8,000 credit was only for first-time home buyers. Now, long-time homeowners can get a credit of up to $6,500 if they bought a new principal residence after Nov. 6 and lived in their old homes for at least five years in a row in the past eight years. The income limits for eligibility also were raised late last year and the deadline extended. You now must have a house under contract by the end of April, and close the deal by the end of June, and you can claim the credit on your 2009 return. But you won’t be able to file a return electronically when claiming the credit. Blame all the fraudulent home buyer claims last year—that cost taxpayers millions of dollars. To fight fraud, the IRS requires that you file a paper return and submit proof that you bought a house. If you’re claiming the $6,500 credit, you’ll need to document that you meet the five-year residency requirement. The IRS will start processing these paper returns in mid-February, and the earliest refunds will go out toward the end of March. If you don’t provide full and accurate information, count on your refund taking longer.  More info on IRS. gov.

Car sales tax deduction
If you bought a new car, motorcycle or mobile home between Feb. 17 and the end of 2009, you may be able to deduct the sales tax paid on the first $49,500 of the purchase price. You don’t have to itemize to get this deduction. The tax break starts phasing out once income hits $125,000 for singles and $250,000 for joint filers. More info on

Energy credits
Congress expanded these for energy-conscious homeowners. For 2009 and this year, claim a credit worth up to 30% of the cost—not to exceed $1,500 over the two years—of adding energy-efficient windows, doors, heaters, air conditioners, water heaters and heating systems. Add a solar water heater, wind turbine, geothermal heat pump, solar electric systems, and the credit is worth 30% of the cost with no dollar limit. More info on

Help for the unemployed
For 2009 only, you won’t have to pay income taxes on the first $2,400 of unemployment benefits received. Also worth noting is the recent expansion of the COBRA subsidy, although this isn’t a tax break. Uncle Sam has been paying 65% of the health insurance premiums for unemployed workers buying coverage under COBRA, the federal law that allows ex-employees to remain on an old employer’s health plan for up to 18 months. This subsidy was recently expanded by six months so unemployed workers can receive assistance for a total of 15 months. It applies to workers who lost their jobs from Sept. 1, 2008, through the end of next month. More info on

Education credit
The $2,500 American Opportunity Tax Credit for higher education improves upon the old Hope Scholarship credit. “For most people, it’s going to be the credit of choice in the education area,” says Mark Luscombe, principal tax analyst with CCH, publisher of tax information. The Opportunity credit covers the first $2,000 spent on tuition, fees, books and required materials, and 25% of the next $2,000 in expenses. You can claim it in any of the first four years of college. And 40% of the credit is refundable, so if you don’t owe any taxes you can get as much as $1,000 back in a refund. The credit begins to disappear once income reaches $80,000 for singles and $160,000 for joint filers.  More info on

Boost your savings
For the first time, you will be able to direct the IRS to use all or part of your refund to buy U.S. Savings Bonds. You can buy up to $5,000 worth of Series I bonds designed as a hedge against inflation. The bonds, sold in multiples of $50, will be mailed to you later. To buy the bonds or have the IRS split your refund among different bank accounts, fill out Form 8888.

Source: Eileen Ambrose – RISMedia

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Reverse Mortgages – the Top 9 Myths

reverse mortgage

Recent headlines pointing to the detriments of reverse mortgages aren’t getting the story straight.

“Because so many Americans over the age of 62 are facing significant financial stress due to dropping retirement and savings account balances, as well as higher healthcare costs, many groups are targeting seniors under the [dis]guise of helping them,” said Scott Peters, CEO and President of Generation Mortgage. “HECM reverse mortgages are Federal Housing Administration-insured products and are heavily scrutinized by regulators and legislators looking to protect seniors’ best interests. As a result, more than 600,000 American seniors have obtained reverse mortgages that have enriched their lives by allowing them to stay in their homes and pay off their bills.”

The top 9 most common reverse mortgage myths include:

Myth 1If I take out a reverse mortgage the lender will own my home.

Fact:  False. Homeowners still retain title and ownership to their homes during the life of the loan, and can choose to sell the home at any time. As long as the house is maintained and property taxes and homeowners insurance are paid, the loan cannot be called due.

Myth 2: My children will be responsible for the repayment of the loan.

Fact: False. Reverse mortgages are non-recourse loans. That means, if the property is sold to pay-off the loan when the homeowner passes away or decides to leave the home for other reasons, there will be no mortgage debt for the family and heirs to repay. The maximum amount owed is the current market value of the house. If the homeowner’s heirs want to keep the home, they would pay the balance in-full to the reverse mortgage lender.

Myth 3: I can’t get a reverse mortgage if I have an existing mortgage.

Fact: False. With enough equity, you may be able to pay off your existing mortgage or other debt with the reverse mortgage. The reverse mortgage must be in a first lien position, so any existing mortgage must be paid off. Seniors who take out reverse mortgages are free to do anything they want with their reverse mortgage proceeds. Paying off an existing mortgage is the number one reason most seniors take out a reverse mortgage.

Myth 4: Only low-income seniors get reverse mortgages.

Fact: False. Although some seniors may have a greater need than others for the monthly proceeds or lump sum funds reverse mortgages offer, most simply prefer to be free of monthly mortgage payments. Without monthly mortgage payments, many homeowners find they can maintain their existing quality of life and build their savings to help with future expenses. A growing number of people who have no immediate need are taking out these loans so that they have a financial cushion for future expenses.

Myth 5: If I outlive my life expectancy, the lender will evict me.

Fact: False. Reverse mortgage lenders put no time limit on how long seniors can stay in their homes. Since homeowners still own the property, lenders cannot evict them, provided they follow the program guidelines.

Myth 6: There are no objective advisors available to seniors trying to decide if a reverse mortgage suits their needs.

Fact: False. Borrowers are required to work with independent, third party counselors approved by the U.S. Department of Housing and Urban Development (HUD) in their local communities. This educational session helps them make the right decision for their unique situations.

Myth 7: There are restrictions on how reverse mortgage proceeds may be used.

Fact: False. There are no restrictions. The cash proceeds from the reverse mortgage can be used for virtually any purpose and borrowers should be cautious of lenders attempting to cross sell other products. Many seniors have used reverse mortgages to pay off debt, help their kids, make ends meet or to have a financial reserve.

Myth 8: Reverse mortgage lenders take advantage of seniors.

Fact: False. Seniors who have been victims of reverse mortgage lending schemes are extreme exceptions and typically victims of unsavory lenders. As a consumer, you should only work with lenders who are Better Business Bureau and National Reverse Mortgage Lenders Association (NRMLA) members and adhere to those organizations’ strict Code of Ethics and Standards for Trust.

Myth 9: I’ve heard I won’t qualify for a reverse mortgage because of my limited income.

Fact: False. Unlike a traditional mortgage where mortgage payments must be made each month, a reverse mortgage pays you. Because of this, many seniors who do not qualify for traditional financing are eligible for a reverse mortgage.

Source: RISmedia

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In honor of Martin Luther King, Jr…

Martin Luther King, Jr.

An individual has not started living until he can rise above the narrow confines of his individualistic concerns to the broader concerns of all humanity.

– Martin Luther King, Jr.

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Happy New Year 2010!

Happy New Year 2010!

Wishing everyone a Happy New Year Celebration!

Make 2010 your Best Year Yet!

A new year!  A new beginning.

What is your primary resolution for 2010?

How will you step up to make 2010 your best year ever?