Category: Real estate

Originally posted on realtor.com.

Homeowners usually see their payment to their home insurance company as a necessary evil. The coverage they offer helps protect your home, belongings, and investment, but those payments can hit your wallet hard.

Shelling out thousands of dollars on an insurance policy may feel like a large financial burden, but did you know that your insurance company can choose to drop or not renew your policy? Circumstances like not paying your premiums, violating the terms of the policy, or committing fraud will obviously jeopardize your coverage, but your company can also drop coverage if it believes you and your property are too risky to insure. In these cases, an insurer may cancel, and you could have a hard time finding another company to protect your property.

Insurers may also decide to not renew your policy for many reasons that don’t ever cross your mind. Consider these common yet unapparent circumstances that could threaten your policy.

Originally published on Realtor.com.

Homeownership is one of life’s great highlights, but ask homeowners about paying property tax and they’ll tell you it’s one of their least favorite responsibilities. But as much of a downer as they are, property taxes are vital for funding schools, libraries, police departments, fire departments, and public works like roads and parks.

Savvy homeowners and prudent buyers are probably aware of the property tax rates in their area, but they may not understand the factors that can drive their property tax rates up. We’re here to help! (With the understanding part, that is.)

So when tax season rolls around, if you find yourself having to shell out more than you did last year, one of these five reasons might be to blame.

1. Home improvements

Renovating a bathroom or kitchen can revitalize a home and add to its worth, but it’s also the most common reason why your property taxes rise, says David Rae, a certified financial planner and president and founder of DRM Wealth Management in Los Angeles. Why? Improving your home makes it more valuable. That, in turn, increases your property taxes.

Converting a walk-up attic or basement into a livable space is also likely to trigger an automatic reassessment, says Rita Patriarca, a Realtor® with Re/Max Encore in Wilmington, MA.

Rae suggests that homeowners run the numbers first. Calculate how much the work will cost you, how much the renovation can add to your property’s value, and whether you can afford a higher tax bill. If you find that the cost of the work is likely to leave you with too little money to pay your higher taxes, Rae recommends holding off and saving more money before you do the work.

Although your tax bill will go up when you renovate, the good news is that you will directly benefit from the update in the form of a brand-new amenity in your home. That’s not the case in some of the scenarios that we describe below.

2. Revaluation

Communities and counties periodically reevaluate properties. During these revaluations, government officials or hired appraisers review all real property to figure out its current assessed value. Revaluations are needed to make sure that the tax burden is spread equitably and accurately among the area’s homeowners.

Lorrie Beaumont, appraiser and owner of LB Appraisal Associates in Westwood, MA, says revaluations are the second most common reason that property tax bills increase.

During the evaluation, an expert will take into account a home’s location, size, and type, and any changes since the last evaluation. The expert will also review home sales and valuations in the neighborhood, changes in the economy and housing market, and any changes in the area that may have improved or reduced a home’s value. Even if the assessor doesn’t enter your home, he or she will review permits to see whether you have undertaken any improvements. So, if you’ve renovated or expanded your kitchen, you can expect higher taxes.

A revaluation doesn’t automatically mean that your taxes will go up, though. For instance, let’s say there’s been a lot of building in your community lately. Having more taxpayers in your community may help offset a tax bill increase.

3. Nearby home sales

If your neighbors sell their homes for more than the asking price, your property taxes may rise. That’s the unfortunate fact, but it’s out of your hands.

Home sales affect what other houses in a neighborhood are worth. While that’s great for your property’s value when you decide to sell, it means a higher tax bill in the meantime.

Rae points out that, for you, this is the least advantageous way your tax bill can increase, because you’re not actually benefiting from living in a nicer home. Instead, you will be paying higher taxes because your neighbors made out like bandits!

4. New schools

Building a new school is great for students and teachers, and for the community overall. However, it will come with a hefty price tag that is likely to entail higher property taxes.

There are two reasons why property taxes can increase after the construction of new schools:

• Communities and counties often increase taxes to help pay for school projects.
• A new school will bring new families to town, which will make your community a more desirable location. The hotter market and the greater competition for homes are likely to lead to bidding wars and higher property values. And, of course, higher property values mean higher taxes.

5. Higher government budgets

One of the main reserves on which cities and counties draw to fund their budgets is the property tax. If government employees are owed a raise, or other budgetary needs increase, the residents’ taxes may need to be increased to help foot the bill.

But rest assured that a community can’t raise taxes at whim: There are limits that require voters’ approval. For instance, Proposition 13 in California and Proposition 2½ in Massachusetts limit how much property taxes can increase.

Still, that doesn’t mean your property taxes won’t go up each year. These limits just put a cap on the increases unless the community votes to raise taxes even higher that year.

Ways to protect yourself against property tax increases

So how can you, as a homeowner, push back and lower your rates (or, at the very least, make sure they don’t reach stratospheric heights)?

One way is to appeal your home’s property assessment, Rae says. Research home sales around you and look for similar homes that are selling for less. “Most municipalities have a process to contest your property tax bill,” says Rae. “I’ve contested the value of my home in the past, and the assessor shaved $150,000 off the taxable value of the home. Definitely worth the effort.”

You should also make sure your property records reflect the property’s amenities accurately, Beaumont notes. “I have seen many instances where records say you have more bedrooms or bathrooms than you actually have, or additional living area that doesn’t exist,” she says. If you do find mistakes, notify the assessor’s office and have the record corrected.

Originally published on HSH.com.

The Supreme Court’s decision in Obergefell v. Hodges in June 2015 opened the way for same-sex marriage in the remaining states that did not allow it.

The ruling has been met with enthusiasm by not only same-sex couples and supporters, but real estate experts who believe the decision will help spark newly married same-sex couples to enter the housing market.

One reason for this optimism came in a recent joint survey by Better Homes and Gardens Real Estate and the National Association of Gay and Lesbian Real Estate Professions. The survey found that:

• 90 percent of LGBT homeowners already see homeownership as a good investment
• 81 percent of LGBT non-homeowners believed the ruling will make them feel more financially protected and confident

Same-sex marriage legalization will especially help couples in the areas of VA mortgages and property-ownership status.

The VA recognizes same-sex marriage of all veterans

Chris Birk, director of education at Veterans United Home Loans in Columbia, Missouri, says the VA loan process has been “more onerous and expensive” for same-sex couples.

Before the recent ruling, the VA has allowed veterans and service members to have a co-borrower who isn’t a spouse or qualified veteran, but the joint loans for same-sex couples covered only the qualified veteran’s portion of the loan amount.

“That left applicants on a joint VA loan – who were not considered spouses – with the need for a 12.5 percent down payment. Most VA buyers make no down payments, which is a significant benefit of this historic home loan program,” says Birk.

After the Supreme Court struck down the Defense of Marriage Act in June 2013, the Department of Veterans Affairs announced it would begin reviewing applications on a case-by-case basis “to determine whether same-sex married couples could proceed in the same manner as opposite-sex couples.”

In the wake of the Supreme Court’s decision in June, the VA announced that it will “recognize the same-sex marriage of all veterans, where the veteran or the veteran’s spouse resided anywhere in the United States or its territories at the time of the marriage or at the time of application for benefits,” says Birk.

“Given that, I think we’ll see more same-sex married veterans and service members look into the VA loan, which is arguably the most powerful loan product on the market,” he says.

Same-sex couples granted full ownership status

Another benefit of the Supreme Court decision will be the way married borrowers typically take title of property, says David Brennan, senior vice president at Cape Cod Five Cents Savings Bank in Barnstable, Massachusetts.

Same-sex couples will now be able to both have “tenancy by entirety” ownership status. This is the strongest form of ownership and means that a spouse automatically takes ownership in the event of the other spouse’s death.

“In many states where same-sex marriages were not allowed or recognized, there were limitations as to the legal types of property ownership status afforded to married couples. The ownership status of ‘tenancy by entirety’ is the most common way married couples take ownership of their property due to its legal advantages and protection for both owners. This form of title ownership, where offered, will now be available to same-sex married couples in all states,” says Brennan.

What will it mean to home buying?

For some real estate experts, the Supreme Court’s decision was deeply personal. Thom Schoepfer, a senior broker-associate and top agent in closed sales at William Raveis in Chatham, Massachusetts, and his partner bought their first home in New York in the early-1980s for $10,000.

“Seeing equality reign in 50 states is a dream,” says Thom Schoepfer, a senior broker-associate and top agent in closed sales at William Raveis in Chatham, Massachusetts, on Cape Cod. “I’m so thankful. Home is part of the American dream and continues to be for people of all stripes,”

Schoepfer and his partner – who have been together all of their adult lives and first bought a home together in New York in the early-1980s – have witnessed gay and lesbian couples go from the fringes of society into the mainstream.

So while Schoepfer doesn’t expect the Supreme Court’s decision to have much of an impact on his area, where same-gender couples have been buying homes Cape-wide, especially in communities with top school districts and low property taxes, he does expect a greater impact “nationally and regionally.”

Teresa Boardman, Realtor at Boardman Realty in St. Paul, Minnesota, isn’t so sure that legalization will flood the housing market with same-sex couples. Boardman says unmarried couples (same-sex and otherwise) have been able to buy homes before the Supreme Court’s decision.

“There are several groups in our society that have always been allowed to marry, but have low homeownership rates. The lack of a good job and a good credit rating holds people back from homeownership as does piles of student debt. Homeownership is lower in Minnesota today than it was in 2005 because of the crash of the housing market and the great recession. The ability to marry just doesn’t seem to have an impact on homeownership,” says Boardman.

Tough to gauge the impact

It’s difficult to gauge how same-sex marriage has affected home sales in the states that had already legalized same-sex marriage. Massachusetts was the first state to legalize same-sex marriage in 2004, for instance, but the Massachusetts Association of Realtors has not collected data concerning sexual preference of homebuyers.

Yes, there was a spike in home sales in Massachusetts that year, but it also coincided with the height of the housing bubble so you can’t say for sure whether same-sex marriage played a large part in the spike.

We’ll have a better idea next year. Adam DeSanctis, economic issues media manager at the National Association of Realtors in Washington, D.C., says the NAR will begin collecting data about same-sex married couples in its 2015 Profile of Home Buyers and Sellers.

Originally posted on HSH.com.

Refinance applications are down to 2009 levels as mortgage rates have shot up past 4 percent again. Homeowners may have been scared away by recent rate increases, but now is still a good time to see whether a refinance would work for you.

Here are three reasons that you shouldn’t wait to refinance your mortgage:

No. 1: You can still take advantage of historically low mortgage rates

Mortgage rates are no longer below 4 percent, but they are still historically low. Homeowners waiting to see whether rates will drop below 4 percent again may have a long wait.

Brian Koss, executive vice president of Mortgage Network in Danvers, Massachusetts, says you shouldn’t expect a return of the sub-4 percent mortgage rates. All of the signs (a healthier U.S. economy and higher international interest rates, for instance) are pointing to higher mortgage rates.

Koss expects mortgage rates to increase in the near term, but doesn’t expect a huge jump. In fact, we may see a slight dip, but more likely a slight increase.

“Fundamentally, (the signs) are pointing to higher rates, but still in the very tight range compared to where we have been in the past,” says Koss.

Trying to time the mortgage dips is an imperfect science, but the clues show that another increase could happen later this year when the Federal Reserve may raise interest rates. The Federal Reserve does not directly set mortgage rates, but its actions can create a ripple effect on rates. On the other hand,the financial situation in Greece could shake financial markets and cause a rate decrease.

Koss warned against trying to time the next possible dip.

“Trying to time it perfectly doesn’t work,” he says.

Given the current climate, Koss suggests those ready to refinance start the process now and ask a trusted lender to lock in a low rate while you’re going through the process. Remember that rates can fluctuate at any time and often change multiple times a day.

Any rate decrease will be a “panic event” and not a “fundamental move,” he said, so you’ll want a trusted lender prepared to lock in a low rate for you.

Keith Gumbinger, vice president of HSH.com in Riverdale, New Jersey, said, “Mortgage rates rise and fall for a lot of reasons. You can look for clues about what will happen by following economic reports, such as the statements of the Federal Reserve after their meetings every six weeks and the monthly employment report that comes out on the first Friday of every month. Rates will rise or fall depending on those reports and generally follow along with the fluctuations of 10-year Treasury bills. You can also follow mortgage rates through sites like HSH.com.”

No. 2: You could save more than $200 a month

More than 6 million borrowers could benefit and qualify for refinancing, according to a recent Black Knight Financial Services Mortgage Monitor Report.

Nearly 3 million borrowers in a traditional refinance and 300,000 of the HARP-eligible population “could save at least $200 per month,” according to the report. Fourteen percent in traditional refinancing and 23 percent in HARP-eligible populations could save $400 or more, according to the report.

U.S. homeowners could save $1.5 billion each month if all eligible candidates refinanced.

To show the importance of low interest rates, Black Knight Financial Services Mortgage Monitor Report suggested that an increase of half a percentage point would cause 42 percent of borrowers (2.6 million people) to fall out of the “refinanceable population.”

Check out our Refinance Calculator to see how much you could save.

No. 3: You may be eligible for HARP

The Federal Housing Finance Agency (FHFA) announced this year it is extending the Home Affordable Refinance Program (HARP) through September 2017.

The program was created in March 2009 and geared to homeowners who are underwater but current on mortgage payments.

More than 3 million homeowners have refinanced through HARP. More than 600,000 eligible Americans have until September 30, 2017 to take advantage of this program.

To qualify for the low interest-rate program, mortgages must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

Originally published on HSH.

Homeownership can be one of the most fulfilling (and frustrating) endeavors in a person’s life.

There are the joys of painting a room or growing vegetables in a garden. But owning a home is not all tomatoes and zucchini. There are a lot of frustrations too.

HSH.com conducted a survey of 1,001 Americans about their biggest annoyances regarding their homes. We gave respondents a list of possible issues and asked them to choose the top five annoyances and rank them from 1 to 5.

The top home-related annoyances were “lack of storage” (67 percent of respondents put it as one of their five top annoyances), which barely edged out “too much maintenance” (66 percent) with “too small” coming in third (52 percent).

Paul G. Wyman, president of The Wyman Group, a real estate company in Kokomo, Indiana, says lack of storage has become a bigger issue over the past decade not because of larger families, but instead people want more room for their stuff.

“Storage is absolutely something people ask us about nowadays. Some older homes lack the storage needed and a lot of newer homes have taken that into consideration,” says Wyman.

People are finding creative solutions to gain storage space. Homeowners are putting closets under stairwells, building larger pantries and using more attic and basement space for storage, he says.

Wyman gives the example of a home he recently visited in which the homeowner finished three-quarters of the basement and left the other one-quarter unfinished for storage. In years past, the homeowner would have likely finished the whole basement for more living area.

“Some people are intentionally making storage spaces in their homes now,” says Wyman.

Maintenance bigger concern for homeowners

Not surprisingly, our survey found that “maintenance” is a bigger program for owners while renters chose” too small.”  Maintenance becomes more of a problem with longevity, according to our survey.

“This seems to be more of a concern for the aging Baby Boomer generation. They don’t want to mow the lawn anymore or keep up with home improvement projects,” says Kimberly O’Neil Mara, CPA, Realtor at Century 21 Spindler & O’Neil Associates in North Reading, Massachusetts. “Often these empty nesters are selling their big homes and downsizing to more manageable homes or even condos where they can just lock the door and head south for the winter any time they want to do so.”

Lack of storage biggest issue for most regions

When breaking it out by region, all regions pointed to lack of storage as the biggest home annoyance except the Northeast, which picked too much maintenance.

The brutal winters, especially the 2014-2015 winter that saw record snowfalls in Northeast cities, coupled with the hot and humid summers make home maintenance a bigger problem there than in regions that don’t see such weather extremes. Plus, older housing stock likely plays a role in the maintenance headache of the Northeast.

Last winter, parts of the Northeast dealt with ice dams on roofs because of the heavy snowfall in a short period of time.  The ice dams caused external and internal damage to homes.

Wyman says it’s important to create a continuous maintenance program. Staying on top of regular home maintenance allows the home to maintain its value and the homeowners won’t be hit for a larger repair bill later.

Know what you really want before you buy

Repeat homebuyers may have more financial flexibility and know more about their own needs/wants than first-time homebuyers. A key to happy homeownership is knowing what bothers you and what you can handle.

“The real key is for the potential homebuyer to clearly define and understand what is really important to them prior to the purchase,” says John Mijac, sales manager at Long Realty Company in Tucson, Arizona. “Part of that may be discovering that what they thought was important is not material at all. It is easy for a potential homeowner, just going into the process, to believe that a pool or a fancy kitchen is the most important thing, when in reality it is a quiet neighborhood or perhaps room and storage in the house.”

Originally published on HSH.

Problems with neighbors can often destroy a person’s quality of life.

Slamming car doors, barking dogs, overgrown trees hanging over your roof. These are all minor in the big scheme of things, but can drive you crazy.

There are many instances in which people finally snap and wind up in the local police log, but usually these frustrations are suffered in silence. That doesn’t make the problems any less impactful to quality of life.

HSH.com surveyed 1,001 Americans about their biggest annoyances about their neighbors. We gave respondents a list of possible annoyances and asked them to choose the top five and rank them from 1 to 5.

We found that “noisy neighbors” (63 percent ranked it in their top five) edged out “too close” (61 percent) as the biggest neighbor annoyances. Both owners and renters chose noisy neighbors as their biggest complaint.

“Your neighbors want you to know a secret: Since you can’t move your house further away, you can at least try to keep the noise down to a respectful level – and that includes your kids, your vehicles and your pets too,” says Keith Gumbinger, vice president of HSH.com in Riverdale, New Jersey.

Kimberly O’Neil Mara, CPA, Realtor at Century 21 Spindler & O’Neil Associates in North Reading, Massachusetts, says noisy neighbors are more concerning for people looking to buy a condo rather than a single-family home. She says she advises condo buyers to find out what type of insulation was used in the floors, ceilings and floors.

“I also suggest checking with the management company/association about rules and regulations. Some have quiet hours, others require a certain percentage of floors to be carpeted to minimize hearing clanking shoes and especially heeled boots of your neighbors simply walking above you,” says O’Neil Mara.

It seems that noise is a problem from the start for many. “Noisy neighbors” were the biggest annoyance for those surveyed who have lived in their homes from 1 to 10 years. That frustration appears to subside with time. The top annoyance for those who have lived in their homes 10 years or more is homes being “too close.”

“You can know a lot about your home and neighborhood before you buy, but you can’t know everything, such as whether they are night owls or not, or have choppers stored in the garage they ride on weekends. You often don’t learn these things until you’ve lived there for at least a while, and you may have to learn to live with some of them,” says Gumbinger.

Regionally, all areas chose “noisy” as the biggest annoyance except for the Northeast, which picked “too close.” Noise and being too close often go hand-in-hand, but Northeast respondents chose too close likely because parts of the Northeast have some of the highest population density in the nation.

Great fences make great neighbors

When it comes to how to resolve noisy neighbors and homes being too close, O’Neil Mara gives people the old advice about fences and neighbors.

“If that is an issue, I always refer to the old saying ‘great fences make great neighbors’ and suggest installing one as soon as they move into the house. It is always much less awkward to do so as part of your original plan than it is to do once you get to know your neighbors and then decide to fence them out,” she says.

Originally published on HSH.

A home may be a person’s castle, but even a moat can’t protect you from the annoyances of your neighborhood.

HSH.com conducted a survey of 1,001 Americans about their biggest annoyances regarding their neighborhoods. We gave respondents a list of possible issues and asked them to choose the top five and rank them from 1 to 5.

Here’s what we found about neighborhood frustrations.

Nothing miffs people about their neighborhood more than busy streets and speeders. The survey found that 76 percent of respondents put “busy streets/speeders” in their top-five neighborhood annoyances. Houses being “too close” came in a close second at 71 percent, and “not enough local retail/food shopping” a distant third at 56 percent.

When broken down by owners and renters, busy streets/speeders remained the number one annoyance for owners, but the top choice for renters is houses being too close.

Frederick Ryan, police chief in Arlington, Massachusetts, says that fear about speeders and busy roads “can compromise some of our most vibrant neighborhoods.”

“A parent in fear of a family’s safety due to speeding cars is no different than a parent’s fear in an inner city urban environment due to violent crime; fear is fear. Yet citizens and officials alike sometimes minimize the impacts of traffic volume and traffic violations,” he says.

The annoyance about busy streets and speeders seems to grow the longer a person lives at a residence. Houses too close was the number one annoyance for those who lived in their homes seven or fewer years, but busy streets/speeders picked up the top spot for people who are in their homes for eight or more years.

Why the change? Respondents likely became more comfortable with the closeness of homes and began looking outward to the dangers on their streets. Plus, speeding cars might not concern you as much until you have children.

Kimberly O’Neil Mara, CPA, Realtor at Century 21 Spindler & O’Neil Associates in North Reading, Massachusetts, says some first-time homebuyers will purchase a starter home and are not concerned about a main road because they don’t see it as their forever home. They, instead, expect to live with the “nuisance in the short term,” she says.

Prospective homebuyers often don’t have the budget to satisfy every desire on their list so they sometimes need to choose a busy street to stay in their price range. John Mijac, sales manager at Long Realty Company in Tucson, Arizona, says it’s important in the process to figure out what are the most important needs. You’re going to live there so make sure it fits – and avoid as many neighborhood annoyances as possible.

What can you do about speeders?

Ryan says neighborhoods with speeding problems should work together with police to educate motorists about the harm of speeding.

“We recommend the triple ‘E’ approach to traffic management: Education, Engineering and Enforcement,” says Ryan. “If neighborhoods and officials seek out environmental and/or engineering solutions they can realize immediate results.”

One common problem is wide-open roads with little visual obstruction, which invite motorists to accelerate. Working together, police and residents can find simple ways to slow down traffic.

“By placing a few strategically located parked cars and ‘necking down’ the roadway, it will likely result in driving down the average speed of cars. In terms of traffic volume, traffic is like water; it will seek its own level. This is where sound engineering and marco-level community planning are essential,” says Ryan.

Check out what our respondents said about their biggest home and neighbor annoyances:

Lack of storage forces many homeowners to find creative solutions

Noisy neighbors causing headaches