Henry Asks… How can I avoid my emotions when it comes to home buying and ensure that I make a sound financial investment?

Often times, it easy to get caught up in the moment as a homebuyer, especially when come across your “dream home.” This can lead to you making a decision with your heart rather than your head. It is important as a homebuyer going through the process of finding a home, to remain level headed. This way when it actually comes time to make an offer, you know you’ll be making a wise financial decision.key

Review the following advice to help avoid the most common emotional mistakes that homebuyers are making these days.

 

  1. Avoid love at first sight. When it comes to real estate, you must avoid falling head over heels for the first property you see. Shop around and be sure to look at a multitude of homes even if you love one of the first few that you see. By doing this you may avoid the buyers remorse, skipping necessary details, and overlooking the true value of the property.
  2. Be realistic about the housing market. As a general rule thumb, you must always remember that there is not necessarily a better deal waiting for you. Do your research on the area in which you are looking to buy and you should definitely get a general feel for what you should expect to pay. By sitting and waiting on a better deal, you may miss the opportunity to buy.
  3. Nothing hurts more than overpaying. We all want to find our dream home and unfortunately for many, when they do they overpay greatly. One of the worst things that you can do as a homebuyer is to overextend yourself financially. Always remain within your budget, even if the home of your dreams is right in front of your eyes.
  4. Understand that lowballing can ruin it all. Like anything, it is common for us to want something at the lowest price possible. But when it comes to home buying it is of utmost importance to make a reasonable bid on the home. A seller will see right through what you think of as “negotiating” and what is in reality, lowballing.

If you do your best to follow the advice listed above, you should be in a home and feeling financially comfortable in no time.

James Asks… Do you have a check list to help me be prepared to do my taxes?

TAXPAYER CHECKLIST

Whether you have scheduled the appointment with the accountant or purchased the     do-it-yourself  tax software, you are now going to have to get organized.  Following is a reference guide of all the data you might need.

Information You Need 

Personal Data

  • Social security numbers (incl. spouse & children)                
  • Your child care provider’s tax ID or Soc.Sec. #                      

Employment & Income Data 

  • W-2 Forms for this year                                                                        
  • Partnership and trust income                                
  • Pensions and annuities                                                                          
  • Alimony received   
  • Jury duty pay                                                                                          
  • Gambling and lottery winnings             
  • Prizes and awards 
  • Scholarships and fellowships
  • State and local income tax refunds      

Homeowner / Renter Data 

  • Residential address(es) for this year                                    
  • Mortgage interest                                                                 
  • Sale of your home or other real estate 
  • Second mortgage interest paid                                                             
  • Real estate taxes paid           
  • Rent paid during tax year                                                      
  • Moving expenses    

Financial Assets 

  • Interest income statements  
  • Dividend income statements
  • Proceeds from broker transactions       
  • Tax refunds and unemployment compensation   
  • Misc. income including contract or freelance work              
  • Retirement plan distribution 

Financial Liabilities 

  • Auto loans and leases           
  • Student loan interest paid                                                     
  • Early withdrawal penalties on CDs                                       
  • Personal property tax information         

Deductible Expenses               

  • Gifts to charity       
  • Un-reimbursed expenses for volunteer work                       
  • Un-reimbursed expenses related to your job       
  • Investment expenses             
  • Job-hunting expenses                                                                            
  • Education expenses               
  • Child care expenses                                                                               
  • Medical savings account       
  • Adoption expenses
  • Alimony paid          
  • Tax return preparation expenses and fees                            

Self-Employment Data 

  • K-1’s on all partnerships        
  • Receipts for business-related expenses                                               
  • Farm income          

Deduction Documents 

  • Estimated tax pmts for current year                                     
  • IRA, Keogh & other retirement plan contributions               
  • Medical Expenses                                                                  
  • Casualty or Theft Losses                                                                        
  • Other miscellaneous deductions                                                           

 

 

Lauren Asks… I am looking sell my house soon, but have been told winter is not a good time to sell. How can I ensure my home sells during the winter months?

It is a common belief that for the months of November through February, the housing market in areas with a cold climates are pretty much stagnant. This idea holds a certain amount of truth to it but probably not as much as you may think. Many individuals and families are facing relocation, divorce and economic struggles – they need a place to live regardless of the time of year, therefore the market is still very active.

To ensure that your home has a better chance of selling  during the winter months, take note of the following tips that will help achieve your ultimate goal of selling your home.

  1. Price your home accurately. Today’s market is a buyer’s market. So in order to avoid a lowball offer from a potential buyer, you need an accurate price listing on when you put your home up for sale. It is particularly important to do this when you list the home in the winter. Buyers always want the best deal.
  2. Advertise with attractive photos. If it just snowed a foot or two, your walkway is covered in ice, or your yard looks like an arctic tundra, please don’t use these photographs as you advertise your home. People want to see the property at its finest so be sure to use some photographs from the warmer months or snap a few pictures on a sunny day when the snow has melted away. Make your home look pretty and attractive.
  3. Increase the curb appeal. Do you still have autumn leaves matted down into your grass? Are there broken tree limbs all around from that last major snow storm? Do you still have a lingering patch of ice on your walkway? If so, or if you have similar feature to your home that is visible from the street, take care of it. It is important to always maintain a great deal of curb appeal when selling a home especially in the winter.
  4. Create a warm and vibrant atmosphere inside. With a few minor adjustments to the decor and feel of your home, you will provide the buyer with that ‘wow-factor’ that will set your home apart from the others on the market.  Do your best to make sure that the interior of your home does not emulate the dreary elements on the outside. A few things to take into consideration are; remove the clutter, don’t go overboard on the holiday decorations, have superb interior lighting, and be sure it has an inviting aroma to it – bake some cookies right before some prospective buyers come over for a showing.

If you follow these 4 easy steps when putting your home on the market during the winter months, you will without a doubt increase its chances of being noticed, remembered and eventually SOLD!

Juan Asks… Is there a tax advantage to making my January mortgage payment in December?

Yes, by making your January 2012 mortgage payment before this years end, you may in fact save yourself a substantial amount of money. If you were to pay your January 1, 2013 mortgage bill in advance, by the end of December, your interest deduction from January would be shifted to this year’s deductions. This translates into you saving money and receiving a greater tax break for 2012. This should be incredibly appealing if you anticipate that you’ll be in a lower tax bracket next year.

In order to do this properly, you must take into consideration the following information:

  • January is the only month that this tax saving situation will apply
  • Make sure that your payment is received in time for it to count towards this year. Keep in mind that December 31, 2012 is a Monday (not to mention New Years Eve) so mailing in your payment a few days earlier or making it on –line would be best to ensure it posts in December.
  • Make a quick phone call to your mortgage company to discuss your intentions. They can also help you assure that this is credited as an interest payment for this year.
  • You MUST be certain that you’ll be in a lower tax bracket next year. Otherwise, you will not be saving much money other than getting and get ahead on your mortgage – which is never a bad thing – just know the facts!

Making your January mortgage payment in advance is a great idea that will save you some money, that is if you fit the criteria above and of course are in a financial situation that allows an additional payment in December!

James Asks… I was divorced a few years ago and my former wife and I agreed to split the bills. She is not paying and the credit card companies are calling ME. I’m not responsible right?

James, unfortunately you most likely ARE responsible!

You have to remember your creditors did not agree to your divorce, only you and your spouse did – they only agreed to extend the credit to you jointly at a time when they had a reasonable expectation of being repaid the debt.

So if it was a joint debt, the divorce decree legally absolves you from the debt. However, the credit reporting aspect is a different story –the creditor will report and try to collect from either party sometimes as long as it takes. Your marital status or income has no bearing on your credit score – it is only based on how well you pay – or don’t pay. The credit score is a numerical assessment of risk. So, if you are trying to keep your credit good through the divorce process, make sure that debts are divided BEFORE the divorce is final and that accounts are refinanced in your individual names – cars and houses etc…

Lines of credit should be paid off and if that isn’t possible a joint account should be set up to pay those joint debts until they are paid in full. Credit is very important and even more so when you are potentially trying to start over with items in your own name, having to rent an apartment or buy a house on your own is difficult if there are items outstanding – regardless of what your divorce decree says!

My best advice is to be vigilant about your credit – monitor it and make sure you are the only one in charge of what happens with your score!

Joseph Asks… A $5 collection runied my credit – how can this happen?

Hard to believe but ANY sort of collection for ANY amount can drop your credit score! In this case I assume it was a mix up maybe with insurance co-pay or something of the like…. My best advice is to be vigilant about your credit because even a $5 collection can drop your perfect 800 credit score into the low 700′s. So make sure you are reviewing you credit regularly, keep your balances low, review the report for accuracy and fix any mistakes or errors and  DO NOT , I repeat  DO NOT ignore calls for payments of bills – even if you think you already paid them – take the time to work it out and get your documentation in order.  A little time spent in the beginning , however frustrating  at the time could save you thousands in interest over your life by qualifying for lower interest rates on borrowed money.

You can get a free credit report once a year from www.ANNUALCREDITREPORT.com

 

 

Jason Asks… I was wondering about Social Security Numbers. Will they ever run out ?

Great question Jason – you would think the answer is YES – however, after some searching I found this article below and the author seems to think we will have enough numbers to issue 5.5 Million per year through 2030!

18 Fast Facts You Didn’t Know About Social Security Numbers

By Len Penzo
This weekend I was looking through the safe that holds all of my most important documents, like family birth certificates, insurance policies and the secret recipe for mom’s sauce, when I ran across my Social Security card.

Now I’ll wager that, if you poll a room full of people at a triple-keg Super Bowl party, over half of them wouldn’t be able to tell you the license plate number of their car — and that’s before the kick-off.  However, if you asked those same folk to recite their Social Security number, they would all be able to do it forward and backward — even after the kegs are empty.

If you’re like me, maybe you’ve wondered if there was any rhyme or reason to how Social Security card numbers are determined.  Well, wonder no more, because while you were out enjoying the weekend, I was sitting here in my chair researching the story behind our Social Security numbers.  I know.  Don’t say a word.

Anyway, here’s what I found out:

1. Since 1936, over 420 million different Social Security numbers have been issued.

2. Over 5.5 million new numbers are assigned every year.

3. The first three digits of a Social Security number are known as the area number.  Area numbers assigned before 1972 reflect the state where you applied for your number; otherwise, they are based upon the Social Security card application mailing address zip-code.

4. Some people believe the next two digits, called the group number, helps identify a person’s race.  It doesn’t.

5. The two-digit group number was actually created as way to organize Social Security Administration filing cabinets into sub-groups to make them more manageable.

6. The last four digits on a Social Security card are serial numbers that are issued consecutively within a group from 0001 to 9999.

7.  Area numbers are assigned geographically with the lowest numbers in the northeast and the highest in the northwest.  That practice will no longer apply, however, after a new randomized assignment methodology officially goes into effect on June 25, 2011.

8. Based upon the original assignment criterion, one would naturally expect a Maine resident to have the lowest Social Security number ever issued.  However, New Hampshire was ultimately given the 001 area number designator so that social security number 001-01-0001 could be assigned to Social Security Board Chairman John G. Winant, who was a three-time governor of the state.

9. Winant eventually declined the honor of having the lowest social security card number.  As a result, it eventually found its way to Grace D. Owen of Concord, New Hampshire.

10. Officially, the first social security number issued was 055-09-0001 and it was assigned to John David Sweeney.

11. Sweeney died of a heart attack in 1974 at the age of 61; ironically, he never received a single penny of Social Security benefits.

12.  In many cases, invalid Social Security numbers can be easily spotted.  That’s because cards have not been issued where the first three digits are 000, 666, or higher than 772.   Valid cards are also never issued with the middle two digits or the final four digits all zeros.

13. In 1938 a sample Social Security card with the number 078-05-1120 was inserted into new wallets manufactured by the E. H. Ferree company in Lockport, New York.   Unfortunately, that number belonged to Hilda Schrader Whitcher, the secretary of an E.H. Ferree Vice President who decided to use her official number on the sample cards.  Nice guy, huh?

14. Not surprisingly, over 40,000 people have since claimed Mrs. Whitcher’s Social Security number as their own at one time or another.

15. Mrs. Whitcher was eventually issued a new number, but not before being questioned by the FBI.  They wanted to know why so many people had her number.

16. If you object to certain digits in your Social Security number you can appeal for a new one, but only if you can prove your concerns are firmly rooted in your religious beliefs or cultural traditions.

17. Social Security numbers are not reused after the card holder dies.

18. Even though numbers aren’t reused, the Social Security Administration says the current numbering system is capable of providing enough new numbers for “several generations into the future.”   That means Social Security numbers will still be available well past 2030.  Even if the benefit money won’t.

 

Henry Asks… How can I avoid my emotions when it comes to home buying and ensure that I make a sound financial investment?

Often times, it easy to get caught up in the moment as a homebuyer, especially when come across your “dream home.” This can lead to you making a decision with your heart rather than your head. It is important as a homebuyer going through the process of finding a home, to remain level headed. This way when it actually comes time to make an offer, you know you’ll be making a wise financial decision.

Review the following advice to help avoid the most common emotional mistakes that homebuyers are making these days.

  1. Avoid love at first sight. When it comes to real estate, you must avoid falling head over heels for the first property you see. Shop around and be sure to look at a multitude of homes even if you love one of the first few that you see. By doing this you may avoid the buyers remorse, skipping necessary details, and overlooking the true value of the property.
  2. Be realistic about the housing market. As a general rule thumb, you must always remember that there is not necessarily a better deal waiting for you. Do your research on the area in which you are looking to buy and you should definitely get a general feel for what you should expect to pay. By sitting and waiting on a better deal, you may miss the opportunity to buy.
  3. Nothing hurts more than overpaying. We all want to find our dream home and unfortunately for many, when they do they overpay greatly. One of the worst things that you can do as a homebuyer is to overextend yourself financially. Always remain within your budget, even if the home of your dreams is right in front of your eyes.
  4. Understand that lowballing can ruin it all. Like anything, it is common for us to want something at the lowest price possible. But when it comes to home buying it is of utmost importance to make a reasonable bid on the home. A seller will see right through what you think of as “negotiating” and what is in reality, lowballing.

If you do your best to follow the advice listed above, you should be in a home and feeling financially comfortable in no time.

Elliot Asks… Homes in my neighborhood are having trouble selling lately. How can I make sure that buyers are impressed with MY house!

BE CREATIVE !!   We are social media junkies now a days – use it to your advantage! Get the word out about your home with a video!  Highlight your home’s best features.  Once you get your home video ready to show, you can post it on YouTube, Facebook, Twitter, your blog and your website . This will not only allow your potential buyer an inside look at your home, it will generate more traffic to your open house showings and thus give you a greater chance at selling your home.

Videos are personal, fun, genuine, and engaging. They give the buyer a whole new outlook on what is a common practice in most people lives and that is searching for a home.  A video helps to eliminate that skepticism that everyone gets when looking at pictures of a home listing. Instead of thinking to oneself is this really what I am going to get? They will know precisely what the home has to offer. Have fun with it!

So, what is the best way to shoot one of these videos? Before taking your potential homebuyer on a tour of the property, take the time to sit down in front of the camera and talk about what exactly makes this property a good investment. Talk about the schools, the neighborhood, the surrounding area etc. Then, take them on the actual tour and be sure to show in detail all the great aspects to your home, whether it be an amazing view or newly installed hardwood floors.

Finally, like any great marketing tool, you’ll have to advertise. Enjoy the process, have fun and tell everyone you can to share and Like and post the video for you! Think instant sales force!

Once you have done this and commit to getting your video out there, success in selling your home will be inevitable.

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