Archive | November, 2012

Dripping Dollars

26 Nov

Conserving water to be green while lowering your monthly bill to save green is a beneficial combination. Little things can contribute significantly to a large water bill.

  • faucet.jpgLeaky faucets can waste over 1,000 gallons a year
  • Leaky toilets can waste 7,000 gallons a month
  • A five-minute shower saves more water than a tub bath
  • Water running while you brush your teeth or shave
  • Sprinkler heads need to be adjusted to spray on the yard only
  • Install a rain sensor on sprinkler system
  • Pool equipment can be a hidden source of wasted water

A larger than normal water bill can be your first indication you have a leak. Then, you’ll need to track it down.

  1. Turn off all the water faucets and appliances; don’t forget the ice maker.
  2. Open the water meter, usually located near the sidewalk in the front of the house. You may need a water key that can be purchased from a home improvement store or possibly borrowed from a neighbor.
  3. Locate the dial indicating water usage. It should not be moving since all of the water is off. If it is still moving, verify that you have turned off anything that might be using water.
  4. If it appears to be still, make a mark with a Sharpie and wait 15 minutes. If the flow indicator has moved, you probably have a leak.
  5. Now that you’ve confirmed that you have a leak, you may need help in locating it. A plumber or leak specialist may be able to help you track it down and repair it.

What’s the Point?

19 Nov

Pre-paid interest, sometimes called “points”, is generally tax deductible when a person pays them in connection with buying, building or improving their principal residence. When points are paid on a refinance, they are not a current deduction but have to be taken pro-rata over the life of the mortgage.percentage.png

For instance, if $3,000 in points were paid on refinancing a 30 year mortgage, deduction of $100 per year is allowed. When the loan is paid off or replaced by refinancing again or the home is sold and the mortgage paid off from the proceeds, the balance of any un-deducted points may be taken in that tax year.

Your tax professional needs to be made aware of any of these situations so that he can accurately reflect the deduction in your return. Currently, the most common situation is where homeowners may be refinancing their home for the second, third or even fourth time. If there are points that have not been completely deducted, they need to be treated in the year of refinancing.

For more information, see points in IRS Publication 936; there is a section on refinancing in this publication. For advice considering your specific situation, contact your tax professional.

Changing the Lock is Key

12 Nov

There are times when you need to change the locks on your home to protect your family and possessions. It should always be considered when you move into a new home; when keys are lost, stolen or unreturned; or a cleaning or other service provider hasn’t returned the key.locks.jpg

Replacing the lockset would give you a totally new mechanism that should work better and if you go back with the same manufacturer, you’ll probably avoid any carpentry. You can order the locks online and have them work with the same key at no extra charge.

Another alternative is to have a locksmith rekey them. The locksmith can easily make all of the locks work with the same key. Compare the cost and decide which would be a better expenditure.

While you’re considering your security, a key safe might be a very convenient addition. Most makers say that it is much easier to break into a home than a key safe. The cost is reasonable and you can attach it to your exterior wall. Generally, they’re combination locks that would allow you access if you or another family member forgot their key. It’s also convenient to give a house keeper the combination and can be easily changed if necessary.

Water Damage – Covered or Not?

5 Nov

A number of things can cause water damage to a home and it’s important to know whether they’re covered by your insurance policy. Some water damage may be covered and other may not be. Generally, you need an incident to invoke coverage rather than something gradual due to lack of maintenance.waterdamage.jpg

However, some incidents are specifically exempt from homeowner policies such as floods. A flood can be described as rising water due to overflow of inland or tidal waters or unusual and rapid accumulation or runoff of surface water from any source.

Homes in designated high-risk flood areas with mortgages from federally regulated or insured lenders are required to have flood insurance.

Even if you don’t live in a dedicated flood zone, you could be affected by flood damage. Review your policy about water damage and call your insurance agent to get a better understanding. Ask if you need to purchase additional coverage or separate flood insurance along with other questions.

Flood insurance can be purchased for the building and the contents. The average flood insurance policy costs about $600 per year. For more information, see the National Flood Insurance Program.

Five Secrets to Buying a New Home

5 Nov

Knowing what questions to ask, how to negotiate & what to expect can reduce costs and make buying a new home an enjoyable experience. Here’s a few of my top tips for buying new construction and hope it helps.

1.  Purchasing a new home within 9o days of completion can be a home run & can typically be bought for a much better price than the same home built from the ground up…..and especially so if complete. Builder homes are financed with interim construction loans and many times they have a limit from their bank on the amount of homes they can build at one time. So to start more homes & remove this home from the books they are willing to give lucrative discounts & incentives on a “spec home.”

2  At the point of offer, request that the builder pay the owner’s title policy.  A title policy will most likely be required by  your lender and will protect you against any claims made against the home prior to ownership such as a roofer not being paid who will seek a lien against the new owner.  In Texas and on a $350,000 home this will save you about $2178 in closing costs.

3.  Know the difference in what’s included in the model and what comes with your new home.  Builder’s models have all the bells & whistles from custom finishes, outdoor living areas and appliances….and they look wonderful. Exactly what is included in your new home is something that needs to be discussed in detail and included in the builder’s contract.  Also, if you are planning on including many upgrades is it more cost-effective to pay for these with the builder, or do these post-completion?  Builders may charge up to $14 a SF & more for handscraped hardwood floors which can be done through local vendors for about $8 a SF.  Don’t be the buyer who goes for all the builder upgrades and then can’t sell their home when they get the transfer call to Chicago. Here in the Frisco, McKinney, Plano and Allen areas….many builders will include a nice and sufficient upgrade package to get started with.

4. Do a “third party” inspection.  I hear you as you’re saying….”But Jeff, it’s a new home.” I know, but builders make mistakes too and why not catch it along the way, or at least upon completion to ensure peace of mind when you move in.  I sold a new home in Plano years ago and when I arrived with my client for inspections, we saw an indoor fountain as water was cascading from upstairs down the shelves of the pantry.  The plumber had forgotten to connect the overflow drain to the tub and they did take care of it, but glad we caught it ahead of time.  I recommend my clients have an inspector complete a 4-stage inspection….at foundation pour, at framing, at sheetrock and then a final to ensure they protect their investment & any issues are taken care of by the builder before closing.

5.  Hire a solid and experienced Realtor who understands all the dynamics of negotiating and can guide you through the new home purchase process.  I could have easily titled this blog….”67 secrets to buying a new home,” but it’s probably too long now.  As a practice, a professional Realtor will tour the new communities in the area such as Richwoods and Lawler Park in Frisco and know what’s happening there and how to match your needs. Also, I know many wonderful and hard-working builder representatives, but guess who they work for……the builder.  You need representation on your side and 95% of builders in the D/FW area have Realtor’s commissions built into their marketing budgets and pricing, so why would you go it solo. A great Realtor can save you thousands of dollars, relieve a lot of stress and ensure you buy a home which will be a strong financial asset and easily marketable in the future.

Thank you for reading and contact me anytime with questions, or advice regarding the exciting adventure of buying a new home.

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