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Michelle Cannon's Blog

By Michelle Cannon | Agent in The Woodlands, TX
  • 5 NEW RIGHTS FOR PROPERTY OWNERS IN HOAs!

    Posted Under: In My Neighborhood in Spring  |  June 7, 2012 10:26 AM  |  383 views  |  No comments

    5 new rights for property owners in HOAs

    Nearly 20% of Texans live in neighborhoods that have homeowners associations (HOAs), and new laws that went into effect earlier this year have provided more rights to those property owners regarding the use of their property.

    Here are five property-related upgrades or additions that HOAs can no longer prevent homeowners from doing:

    1. Install a solar-energy device on the property.
    2. Install and use rain-harvesting devices.
    3. Display certain religious items on the entry of the property.
    4. Install roof shingles that are wind and/or hail resistant, energy efficient, or solar generating.
    5. Fly the U.S., Texas, or a branch of the U.S. armed forces flag.

    Each of these rights apply to condos as well. It’s important to note that a homeowners association may place some parameters on these rights.

  • 5 TIPS FOR FINDING THE RIGHT MOVERS!

    Posted Under: Home Buying in Spring, Home Selling in Spring, Moving in Spring  |  May 28, 2012 8:08 AM  |  346 views  |  2 comments

    5 tips for finding the right movers

    Think three

    There’s no harm in calling multiple moving companies for estimates, but decide on at least three that you want to learn more about.

    Get an in-person assessment

    Most people aren’t good at judging how much stuff they own, and while some companies have online tools to help you create an estimate with your best guess, you should have your top-three picks visit your home and take inventory for an accurate estimate.

    You’ll be asked about what you’re planning to take, the moving supplies that you need, and about your heavy or fragile items. Your movers will need to know the layout of your new home, too, so don’t forget to tell them about the three flights of stairs or your lack of a driveway.

    Ask questions

    There are plenty of questions you can ask depending on your situation, but here are some you shouldn’t miss.

    • Are you licensed for in- or out-of-state moves? The Texas Department of Motor Vehicles licenses moving companies, which must display a valid TxDMV or United States Department of Transportation license number on the truck to operate legally. Find out if a company is licensed on the TxDMV website.
    • What type of insurance do you carry? (workers’ compensation)
    • What insurance coverage do you offer? (valuation or replacement coverage)
    • Can I pack myself? Will my items be covered if so?
    • Is your crew bonded? (protection in case of employee theft, vandalism)
    • Are there items you won’t transport? (light bulbs, batteries, gas)

    Be honest

    Be upfront about what you need your movers to do, whether it’s packing and unloading, assembling or dissembling items, or heavy lifting. You may think you can get a deal by glossing over details, but you’ll ultimately pay more for your hidden extras and your movers won’t be pleased.

    Negotiate the deal

    You’ll receive an estimate from your moving companies based on several factors, such as the distance of the move and the potential gas expense, the weight or square footage that your items will use in the moving van, and labor costs. This is where having more than one estimate will come in handy. Don’t be afraid to tell your top pick if you’ve received a lower estimate that appeals to you, or roughly how much you want to spend. Look for other areas in which you can negotiate, such as free hauling services or reduced rates for extra supplies or a different move date.

    Your movers can be a huge help, but only if you put in the effort to choose the right one for your move.

  • SHORT SALE INCENTIVES!

    Posted Under: Home Buying in Spring, Home Selling in Spring, Foreclosure in Spring  |  May 21, 2012 7:57 AM  |  470 views  |  No comments

    Bank of America in $30,000 Short Sale Incentive

    As part of its efforts to reduce the number of foreclosures on its books, the Bank of America is offering relocation payments of up to $30,000 to struggling homeowners to induce them to agree to a short sale.

    In recent months, major banks in the US have become increasingly willing to embrace short sales as a cheaper alternative to foreclosure, as the latter is now far more expensive and time consuming to process, reported CNN Money.

    Short sales allow the banks to reclaim possession of properties far more quickly than the foreclosure process, and as a result these homes are often in a much better condition for resale. In addition, studies have shown that short sales tend to recoup more money than foreclosures.

    Because of this, banks have hit on the idea of financial incentives to induce homeowners who can’t pay their mortgages to agree to a short sale. Bank of America began a pilot scheme last year in Florida, paying out up to $20,000 in some cases. JP Morgan Chase quickly followed suit, launching a program that offered cash incentives of up to $35,000 for homeowners to agree to short sell their properties.

    Following the success of the pilot scheme, Bank of America are now introducing their short sale incentive program nationwide. In order to qualify, homeowners need to get the sales price of their home pre-approved, and the sale must be completed by September 26 next year.

    Bob Hora, an executive with Bank of America, said in a press release that “Bank of America is committed to providing alternatives to foreclosure whenever possible.”

    “This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home.”

  • REMODELING LOOKING UP IN 2012

    Posted Under: Home Buying in Spring, Home Selling in Spring, Remodel & Renovate in Spring  |  April 30, 2012 12:58 PM  |  375 views  |  2 comments

    Remodeling Looking up in 2012

    Homeowners are ready to make 2012 a banner year for remodeling and the latest cost-for-value research suggests that getting the most bang for every buck is more important than ever.

    The Remodeling Market Index (RMI) hit a five-year high at the end of 2011, indicating that residential remodeling should continue to grow in 2012, according to panelists at a press conference at NAHB’s International Builders’ Show. After a slow start, home improvement spending is expected to trend up later this year, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. If this momentum continues to build during the second half of the year, remodeling activity is on course to end 2012 on a positive note.

    However, consumers want to get the most for their money.

    Remodeling Magazine’s annual Cost vs. Value report for 2011-2012 found that the trend right now is replacement over remodeling—swapping out the old for the new rather than doing a total gut job, which can be much more costly. Exterior replacement projects—such as new garage doors and a new entry door—offer some of the best returns at resale, allowing home owners to recoup close to 70 percent or more of the costs of the project at times of resale.

    The following are the top, mid-range projects from this year’s report, based on what home owners stand to recoup at time of resale:

    1. Replacing the entry door to steel
    Estimated cost: $1,238
    Cost recouped at resale: 73 percent

    2. Attic bedroom (converting unfinished attic space into a bedroom with bathroom and shower)
    Estimated cost: $50,148
    Cost recouped at resale: 72.5 percent

    3. Minor kitchen remodel (including new cabinets and drawers, countertops, hardware, and appliances)
    Estimated cost: $19,588
    Cost recouped at resale: 72.1 percent

    4. Garage door replacement
    Estimated cost: $1,512
    Cost recouped at resale: 71.9 percent

    5. Deck addition (wood)
    Estimated cost: $10,350
    Cost recouped at resale: 70.1 percent

    6. Siding replacement (vinyl)
    Estimated cost: $11,729
    Cost recouped at resale: 69.5 percent

  • THE FIVE FACTORS OF CREDIT SCORING!

    Posted Under: Home Buying in Spring, Financing in Spring, Credit Score in Spring  |  April 9, 2012 12:44 PM  |  501 views  |  No comments

    The Five Factors of Credit Scoring

    There are five factors that comprise the credit score. They are listed below in order of importance, just as an underwriter would look at the score:

    •Payment History: 35% impact. Paying debt on time and in full has a positive impact. Late payments, judgments and charge-offs have a negative impact. Missing a high payment has a more severe impact than missing a low payment. Delinquencies that have occurred in the last two years carry more weight than older items.

    •Outstanding Credit Balances: 30% impact. This factor marks the ratio between the outstanding balance and available credit. Ideally, the consumer should make an effort to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when trying to purchase a home.

     •Credit History: 15% impact. This marks the length of time since a particular credit line was established. A seasoned borrower is stronger in this area.

     •Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive than a concentration of debt from credit cards only.

     •Inquiries: 10% impact. This quantifies the number of inquiries that have been made on a consumer's credit history within a six-month period. Each hard inquiry can cost from 2 to 50 points on a credit score, but the maximum number of inquiries that will reduce the score is 10. In other words, 11 or more inquiries in a six-month period will have no further impact on the borrower's credit score.

    Remember, a computer that's not taking any personal factors into consideration calculates these scores. When a credit report is generated, it is simply today's snapshot of the borrower's credit profile. This can fluctuate dramatically within the course of a week, depending on the individual's own activities. Borrowers should be made aware of this when they enter into the loan process, and know that it's not in their best interest to go out on a shopping spree. They need to make sure they are not creating a negative impact on the score while the lender is reviewing their file.

    Secondly, it is often beneficial to compile a tri-merge credit report. This provides scores from the three credit bureaus, Experian®, TransUnion®, and Equifax. The lender should be provided with this rounded profile because these three scoring systems can vary in their results. The lender is going to look at the middle score and throw out the other two. In many cases, this works to the borrower's advantage.

  • SCAM WATCH

    Posted Under: Crime & Safety in Spring, Financing in Spring  |  March 19, 2012 10:42 AM  |  569 views  |  No comments

    Scam Watch: IRS warns of Tax-Refund Schemes

    Here is a roundup of alleged cons, frauds and schemes to watch out for this tax season.

    Tax Refunds
    As the tax-filing deadline approaches, the Internal Revenue Service said consumers should watch out for scam artists who offer to help them obtain tax refunds through the filing of bogus returns.

    In one common scheme, companies offer to help victims obtain a tax refund by seeking an American Opportunity Tax Credit by claiming deductions for college tuition payments, even if the victim did not attend college during the tax period, the IRS said.

    In recent weeks, the IRS has stopped thousands of bogus refund claims using that fraudulent deduction. Even if someone else files the return, taxpayers can be held liable for submitting false deductions, including penalties and interest, the IRS said.

    Loan Modifications
    Consumer groups are warning homeowners who have fallen behind on their mortgages to be careful when dealing with companies or individuals offering to modify home loans.

    Homeowners should be mindful of companies that ask for fees before providing services, guarantee they can stop a foreclosure or tell you to stop making mortgage payments and pay them instead, NeighborWorks America and the Lawyers’ Committee for Civil Rights Under Law said in a news release.

    “Scams present a real threat to homeowners who are afraid of losing their homes, especially now that new bank settlements and government programs are in the headlines,” says Deborah Boatright, Northeast regional director with NeighborWorks America. “At times like this, we often see a spike in activity among companies who pretend to be authorized by the government but are in fact scams."

  • TAXING MATTERS!

    Posted Under: Financing in Spring  |  March 12, 2012 9:29 AM  |  467 views  |  No comments
    Taxing Matters: Now’s the Time to Start Planning for Possible Hikes

    As tax return season starts, many of us are thinking of what we could have done last year to lower our taxes and what we can do now to lower taxes in the future. While it may be too late to change 2011 taxes, it’s the perfect time to plan moves to make in 2012.

    As it stands now, when 2013 gets here, taxes are going up. The tax cuts created by President George W. Bush expire this year and brackets return to the previous rates of up to 39.6 percent in 2013 from 35 percent now. It affects lower income taxpayers too. The 10 percent bracket disappears and 15 percent becomes the lowest tax bracket. In addition, the child tax credit expires and capital gains rates go back to 20 percent from zero to 15 percent this year.

    The only thing that could stop these changes is Congress. Being an election year, taxes are a hot topic. But it’s also a topic that may not see much action with a possible change in leadership after the election. A possible gridlock and unknown outcome make it important to take planning into your own hands to head off the potential tax hike.

    Here are some possible actions to take this year if a tax hike is imminent:

    1. Convert traditional IRAs to Roth IRAs. While this decision is based on each individual’s situation, those that are considering converting may want to pull the trigger this year. Conversions are considered ordinary income so they’ll be taxed at the individuals’ current tax rate. For the wealthy, it would be better to be taxed at 35 percent instead of 39.6 percent.

    2. Take income earlier. If you are able to control when income is received, taking it in 2012 could result in it being taxed at a lower rate.

    3. Sell profitable investments. If the capital gains tax is headed to 20 percent in 2013, some individuals may want to consider cashing in gains at 15 percent this year.

    4. Reduce dividends. If qualified dividends become taxed at the taxpayer’s tax rate in 2013 instead of zero to 15 percent now, some individuals may want to rebalance their portfolio to put investments that pay no or lower dividends in their taxable accounts and higher dividend investments in tax-deferred accounts such as 401ks and IRAs. On top of this, in 2013 investment income would be taxed an additional 3.8 percent for those with incomes over $200,000 or $250,000 for married filing jointly. This includes interest, dividends, capital gains and rents. The tax is part of the health care reform plan to help the Medicare program.

    Tax planning in a time where the future is unknown is difficult, but knowing what could change can help anyone prepare now to make changes to their finances if needed.

    Dan Serra is a financial planner with Strategic Financial Planning Inc. in Plano, Texas.

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