Thomas Murphy - Pine Shores Real Estate

Posted by Thomas Murphy on 2/18/2018

Buying a home is one of the biggest and most useful investments that youíll make in your lifetime. One thing you should understand when you're making big improvements to a home or doing any kind of high return renovations is that of the Capital Gains Tax. This tax can take away from the return on your investment, especially under the right circumstances. Even with minimal improvements to a home, if an area has seen an upswing in popularity, you could end up paying the price when you go to sell. 

Taxpayer Relief Act

The Taxpayer Relief Act of 1997 can help many people to hang on to the returns they see from the sale of their home. 

Previously, homeowners could qualify for a one-time tax exemption of up to $125,000 on the sale of a home. They also could combine the earnings in on the purchase of another home. Currently, there are a few ways that you can save on the Capital Gains Tax thanks to the TRA. 

House Flippers And Homeowners Arenít Equal

Not all home sales receive an equal tax treatment. If you are flipping houses, youíre out of luck when it comes to receiving profit-friendly tax breaks. You need to have lived in a home as your primary residence for two out of five years of owning a home in order to qualify for tax breaks. If this isnít the case, youíll end up paying a Capital Gains Tax on the sale of the property. If youíre a professional house flipper, your homes are considered inventory and taxed as income. The tax on this can vary from 15% to 20%, depending upon the tax bracket you fall into.

The Type Of Property Matters When It Comes To Taxes

Whether the property is a primary place of residence, a vacation home, or a rental property, the gains are all taxed differently. If you own a second home that youíre interested in selling, itís not treated the same as a primary residence for tax purposes. Youíll be taxed based on the amount of time that you owned the property, or the amount of time that the property was used as a second home. The taxes are based on a prorated amount of time.

The Price Of The Home Doesnít Matter

You may think that higher priced homes are taxed more heavily than less expensive homes. This would be the case when it comes to property taxes, but it isnít so when weíre talking about Capital Gains Taxes. These taxes are based on how much profit is made from the sale of the home. If a loss was taken, or the homeowner ďbroke even,Ē they may not owe as many taxes. A smaller home that had significant improvements made could be taxed a bit more than a home that was sold at a higher price with fewer upgrades.

Posted by Thomas Murphy on 2/11/2018

Buying a home is a complicated process with a lot of opportunities to make costly mistakes. Thereís no high school class to prepare you for buying a home but there probably should be. If youíre a first time homebuyer and you came across this article looking for advice, congratulations--youíre already doing the most important thing you can when making a big financial decision: the research.

In this article, weíll cover some of the most common mistakes that first time homebuyers make when entering the real estate market. Weíll break it down by the three main phases of home-buying: saving for a home, hunting for a home, and signing a mortgage.

Saving for a home

One of the first lessons that all first time homeowners quickly learn is that being able to afford your monthly mortgage payments doesnít mean you can afford a home. Many first time buyers are often coming from living situations where certain utilities are included (water, heat, electricity, etc.). Aside from those obvious expenses, there are also things like property tax and home insurance to budget for, both of which may increase. Finally, when youíre living in an apartment and your faucet breaks, you simply call the landlord. When you own a home, especially an older home, be prepared to spend on repairs and to start learning basic maintenance skills that will save you money.

The hunt for your first home

Now that youíre aware of the costs, it might be tempting to jump in and start looking at homes. Another common mistake first time homebuyers make is to waste time looking at homes before theyíve met with a real estate agent or have gotten pre-approved for a loan. Start there, then once you know the scope of your home search, youíll have a much more relaxing hunt for your new home.

Another mistake that first time homebuyers make is to underestimate the time and commitment it takes to find a home. When you work with a real estate agent, make sure you are available at all times. Keep your phone nearby, stick to your schedule for viewing homes, and keep a list of each home youíre considering. Showing initiative and dedication wonít just help you stay organized, it will also show your agent and the home seller that you are worth their time.

Mortgage mistakes

One of the most common mistakes that buyers make when it comes to their mortgage is to fail to shop around for a lender. In fact, the Consumer Financial Protection Bureau found that only half of all buyers considered more than one lender for their home.

Buyers, first time and repeat, often think their credit report is set in stone. What they donít realize is that the three main credit Bureaus (Experian, Equifax, and TransUnion) can all make mistakes on your credit. Check your detailed credit reports and fix any errors long before applying for a mortgage to increase your chances of getting a good rate.

If you avoid these common mistakes and continue to do your research along the way, you should be able to save yourself some headaches and some money in the long term.

Categories: Uncategorized  

Posted by Thomas Murphy on 2/4/2018

When you buy a home, you suddenly realize that your wallet and bank account become quickly drained with all of the expenses involved. If you want to save money when you own a home, youíll need to find ways to cut down on your spending. This takes some creativity and some budgeting. The good news is that you donít have to sacrifice everything in order to live in the home you want. There are many ways that you can trim your budget and you probably never even thought of them.  

The Grocery Store

We all need to eat, so you definitely canít eliminate food from your budget! You can get your grocery bill down significantly with some careful planning. 

One of the biggest problems that people have, when they head to the grocery store, is that they simply shop without a plan. Make a list of what you need to buy. There are certain things that just about everyone needs every grocery trip like milk, bread, and eggs. If you go into the store with a list, youíll have a plan that you can stick to. Know what youíre going to cook and what everyone will eat throughout the week. If you bring coupons along on a grocery trip, try not to bring anything that you donít have use for. Youíll overspend if you buy just based on coupons. After you start your new system, you can have a clear budget that will become a habit over the course of time.

Donít Pay For What You Donít Use

Are you paying for things like a landline telephone or cable? Do you actually use these services? Cutting the cords can save you a lot of expenses. Also, youíre truly wasting money if youíre paying for something that you donít use. Thereís also some cheaper alternatives available when it comes to these types of services. 

Do More Yourself

While you may have relied on the luxury of a cleaning service or a landscaping service, you can cut these things out of your budget. Itís fairly simple to clean up after yourself, just set some standards with your family in order to keep the house up. As far as landscaping, you can probably do some of the mowing and raking on your own. You can still keep these services, but perhaps you want to save the maid for an every other month deep cleaning of your home. 

Other Places To Cut Expenses

Depending upon your lifestyle and needs, there are probably a few other places that you can save in your budget. These include:

  • Seeing where you can save on insurance policies
  • Finding alternatives for pet care and child care
  • Cutting back on your commuting costs by carpooling or using public transport

When you take a good look at your budget, youíll see that there are plenty of ways that you can start saving, yet still live in the home of your dreams and keep your lifestyle.

Categories: Uncategorized  

Posted by Thomas Murphy on 1/28/2018

Selling a house the second time around may prove to be much easier than your initial home selling experience. In fact, a veteran home seller can learn a lot from his or her past home selling experience, including:

1. How to Establish a Competitive Initial Home Asking Price

Setting a competitive initial home asking price is paramount, regardless of a home seller's experience. If a seller establishes a competitive initial asking price from the get-go, he or she can increase the likelihood of stirring up plenty of interest in a house. Conversely, a seller who sets an initial asking price that is too high or too low may struggle to achieve the optimal home selling results.

Think about how you priced the home that you most recently sold. This experience may help you determine how you'll price your current house, as well as enable you to avoid potential pricing mistakes along the way.

Furthermore, it usually helps to look at the prices of comparable houses in your city or town. If you assess this housing market data, you can see how your house stacks up against the competition and narrow the price range for your residence.

2. How to Promote a House to the Right Groups of Buyers

If you previously struggled to showcase your house to buyers, you can learn from your past experience and avoid making the same mistakes once again.

Ultimately, a home seller should allocate time and resources to enhance the curb appeal of his or her home. If a house features a stunning exterior, it may generate lots of interest from buyers.

It often helps to maintain a clean home interior as well. If you keep your home neat, tidy and clutter-free, buyers should have no trouble envisioning what life might be like if they purchase your house.

3. How to Hire the Right Real Estate Agent

Conduct an in-depth search for the right real estate agent Ė you'll be glad you did. If you meet with a variety of real estate agents, you can find a housing market professional who can help you achieve your desired home selling results.

Don't forget to request client referrals from a real estate agent. Because if you can learn about past clients' experiences with a real estate agent, you can make an informed choice about whether to hire this real estate agent to guide you along the home selling journey.

Ready to add another house to the real estate market? Use your home selling experience to your advantage, and you can boost your chances of enjoying a profitable home selling journey.

Categories: Uncategorized  

Posted by Thomas Murphy on 1/21/2018

Buying a home is one of the more complicated purchases that youíll make in your lifetime. Itís not something that you can just open your wallet, pull out a wad of cash and buy. Thereís a warm-up period for a house hunt. You need to prepare before you even start the process of the purchase. Thereís a lot of different things that you should do to ready yourself to buy a home. Youíll need to organize your finances, find a real estate agent and ready yourself. If youíre looking to buy a home in the near future, itís time to get busy! 

Keep Your Credit Score In Check

Your credit score is so important for so many reasons. The highest your credit score can be is 850 and the lowest it can be is 300. Youíll get a really good interest rate on a home if your credit score is 740 or above. A lower interest rate can save you a lot of money over a yearís time. 

The good news is that you can spend time repairing your score. This will include paying down debt, asking for credit limits to be raised and correcting errors that may be on your credit report. You want to be sure that youíre using 30% or less of your total available credit. As always, if your bills are paid on time, it will help you to keep that score up. Also, stay away from opening new credit cards, as this can bring your score down due to frequent credit checks. 

Put Gifts To Good Use

Whenever you get a financial gift, whether it be for a wedding, a Christmas bonus, or a birthday gift, make sure that you save it for your home purchase. Youíll need quite a bit of capital between closing costs, fees and down payments. Youíll be glad you saved the money once you start the home buying process. Youíll also want to make sure that you have and emergency fund built up. You donít want to buy a home without some sort of a financial cushion behind you. 

Research Real Estate Agents 

Your real estate agent will be your right hand person when it is time to buying a home. Youíll want to know that your agent is knowledgable and can help you in this big decision. Your real estate agent is the person who will help you reach your goals, and you want to feel comfortable with them. Ask for recommendations and do your research.  

Get Preapproved

Sellers love buyers who have been preapproved. This shows that theyíre reliable and financially able to buy a home. A preapproval can be done a few months in advance of buying a home. It will take an in-depth look at your finances including:

  • Proof of mortgage or rent payments over the last year
  • W2 forms for the past 2 years
  • Paycheck stubs for the past 2 months
  • List of all debts including loans and court settlements
  • List of all assets including car titles, investment accounts and any other real estate you may own.

Buying a home is a big deal but with the right preparation, youíll be on the road to success and ready to secure a home purchase.

Categories: Uncategorized