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By Stephen Clyde | Agent in 08009
  • Replacing a sliding patio door

    Posted Under: Remodel & Renovate in Berlin, Going Green in Berlin  |  June 15, 2012 8:53 AM  |  232 views  |  No comments

    Doing it yourself cuts costs, but can you afford the time?

    Q: I'm not sure when my house was built, but I have old-style, anodized, single-pane aluminum windows and doors. As an ongoing project, I want to replace the old stuff. To start, I want to replace my patio door with a new energy-efficient one. Can I leave the frame in or must I remove all of it?

    A: You're wise to do this job in stages: one opening at a time. Retrofitting windows and doors is a fairly big job, but a good one for a couple of dedicated do-it-yourselfers with moderate carpentry skills.

    Bill recently replaced the old, 6-foot aluminum slider in his Walnut Creek, Calif., house with an energy-efficient vinyl model. He's no longer able to do this type of work himself, so he hired a skilled carpenter and an assistant. The guys were in and out in about four hours, and Bill ended up writing a check for $3,800. If you do the job yourself, figure it will take you twice as long, but you'll pay half as much.

    As for replacing your slider, it depends on what you mean by the frame. If you mean keep the anodized frame and just replace the panels, the answer is no. But you can certainly remove the entire door, leaving the wood framing in place and then put in a new unit.

    Realize though that you may have to make some modifications to the 2-by-4 framing in the opening.

    Get started by removing the old door. First, take off the interior and exterior trim. For each trim piece, score the paint and caulking with a utility knife so as not to damage walls when removing it. Slide a putty knife into the joint where the trim meets the door frame. Pry the trim away from the door enough so you can work a flat bar into the space and slowly pry off the trim piece. If you're careful, you should be able to reuse these pieces.

    Now, remove the sliding panel. With the trim off, the nailing fins on the exterior are exposed and the door can be removed.

    You will want to remove as much weight as possible, so first lift the sliding panel out of the door and put it in your recycling pile. Then, remove the nails in the nailing flange with a tool called a cat's paw. There also will be a number of screws through the frame, especially through the sill, which will need to be removed. Then, with all nails and screws out, remove the old door and frame.

    Measure the rough opening and check that it's plumb and level. Even though you're replacing an old slider with a new one, the rough openings may differ. If that's the case, some modification of the opening will be necessary. Usually, the new door requires a smaller opening.

    If so, build out the opening with the correct width of plywood to get the right rough opening. If the opening needs to be enlarged, reframing it is a big job. We'd probably return the new door and search for one that fits.

    Installation is fairly straightforward. The new door will come with detailed instructions. Follow them to ensure that new door is properly secured to the rough framing. Pay attention that the door is plumb and square in the opening and that it is properly caulked and insulated to prevent water and air infiltration.

    For a more detailed look, we found a thorough instructional video on replacing a sliding patio door: www.ronhazelton.com/projects/how_to_install_a_sliding_patio_door.

  • Negative equity holding back sellers

    Posted Under: Market Conditions in Berlin, Home Selling in Berlin  |  June 15, 2012 8:51 AM  |  247 views  |  No comments

    CoreLogic: Unsold inventory in April at lowest level in more than 5 years

    Inventory of unsold homes on the market declined in April as the share of underwater homeowners rose, according to a monthly report from data aggregator CoreLogic.

    The number of unsold homes on the market was at its lowest level in more than five years in April -- a 6.5-month supply. While that supply level is considered "reasonably healthy," it also means that there are "significantly fewer buyers" on the demand side of the market, according to Anand Nallathambi, CoreLogic's president and CEO.

    "Historically, current homeowners trading up represent the biggest segment of the purchase market," he wrote in the report. "But with more than 20 percent of homeowners underwater, another 25 percent of all homeowners possessing less than 20 percent equity in their homes, and tightened underwriting requirements, this potential pool of buyers has effectively been eliminated."

    Among the 50 largest metro areas in the country, those with the highest percentages of mortgages in negative equity also have the lowest inventory levels, according to CoreLogic's findings. For instance, markets where more than 50 percent of borrowers are underwater had an average months supply of 4.7 months in March, while those where less than 10 percent of borrowers are underwater averaged 8.3 months' supply, the report said.

    "While the rapid decline in months' supply is typically good news because it indicates a better balance between demand and supply, this decline is occurring less because of an increase in sales and more because of a drop in unsold inventory as a result of negative equity," wrote Sam Khater, CoreLogic's senior economist.

    "The presence of negative equity not only drives foreclosures, reduces the availability of purchase down payments and impedes refinances, but also restricts the ability of owners to list their homes for sale as the demand side of the market improves," he added.

    Because negative equity tends to be higher among homes with lower home values, supply also tends to be tighter, and that has spurred a rise in prices at the lower end of the price spectrum, the report said.

    "Over the last two months, the prices of less expensive properties (those priced at less than 75 percent of the median) are up an average of 4.5 percent from a year ago, compared to 0.6 percent for higher-priced homes (priced at more than 125 percent of the median)," Khater wrote.

    "We have transitioned from pricing dynamics driven by economic weakness and high shares of distressed sales to one of restricted supply, which will likely exist for some time to come -- a reason for optimism in many hard-hit markets," he added.

  • What you should know if you're divorced or have student loan debt

    Posted Under: Home Buying in Berlin, Financing in Berlin, Credit Score in Berlin  |  June 14, 2012 11:48 AM  |  288 views  |  No comments

    Do I jeopardize my mortgage application by changing jobs before the loan closes?

    Yes. The underwriter approved your application based on your documented income covering two years or longer, from one source. At closing you must certify that all the information in your application continues to be true, which short of committing perjury you won't be able to do if you switch jobs. Your revised job history will be numbered in days rather than years, which could cause a rejection.

    Back in the pre-crisis days, underwriters had discretion to use their judgment in such cases. If the borrower was moving up to a better position in the same field, for example, they would let it go. In today's market, however, underwriter discretion has been markedly reduced, and the likelihood of rejection is uncomfortably high. The prudent thing to do is to defer the job change until after the loan closes. Nobody will care what you do then.

    Will the rental income I receive from renting out my house during part of the year help me qualify for the mortgage I need to buy that house?

    No, anticipated rental income cannot be counted as qualifying income unless it is documented in the owner's tax return for at least two years. Further, only income net of expenses would be counted, and that number would be very small or zero if you expense everything you can in order to avoid taxes.

    Can I qualify using my income and my spouse's credit?

    No. Good credit without the means to pay is of little value to lenders, and good income without the willingness to pay is not much better. Lenders require both capacity to pay and willingness to pay in the same person.

    Before the financial crisis, married couples who had one spouse with the required income and the other with good credit often took "stated income" loans. Stated income was not verified by the lender. These loans were taken in the name of the spouse with good credit, who stated that the income of the other spouse was theirs. But stated-income loans no longer exist.

    Have preapprovals become more useful to homebuyers since qualification requirements became more restrictive?

    Yes and no. The main purpose of preapprovals is to establish the bona fides of potential homebuyers to home sellers and their agents, who don't want to waste time dealing with wannabe buyers who can't qualify for a mortgage. With an increasing number of potential homebuyers unable to qualify, the value of reliable preapprovals has increased.

    However, the same factors that make it more difficult to qualify for a mortgage today also make preapprovals less reliable. This is especially the case with self-employed buyers, who may be rejected despite having been preapproved. Preapprovals are always subject to conditions, the most important of which is a minimum appraised value. If an appraisal comes in below the minimum, the preapproval dies.

    As a "nonpermanent resident alien," can I qualify for a mortgage?

    Yes, but the terms are a little stiffer because of the risk that you might be obliged to leave the country. Lenders will require a larger down payment and/or a higher interest rate. In contrast, a "permanent resident alien" suffers no penalty.

    Can an excess in appraised value over the purchase price be used to meet a minimum down payment requirement?

    No, the down payment requirement is based on the lower of purchase price and appraised value. Any excess appraised value is ignored.

    Will sizable student debt prevent my qualifying for a mortgage?

    It may if you must begin repaying the debt within the first year of the mortgage, and if the amount is large relative to income. If the payments are deferred more than a year, it is a judgment call by the underwriter who will consider the size of the student debt, your credit and perhaps other factors.

    As a divorced spouse who remains liable on an existing mortgage, can I qualify for a new mortgage?

    Yes, if your income is large enough to afford the payment on two mortgages. If you can afford a new mortgage but not two mortgages, you must induce your ex-spouse to refinance the mortgage in her own name. Such a provision should have been part of a separation agreement.

    The only other possibility is to convince the new lender that the ex-spouse remaining in the house is sufficiently creditworthy that there is negligible risk of your having to meet two payments. That will require documentation that your ex has been making the payments on her own for at least a year.

  • Distressed for Homeowners!

    Posted Under: Home Selling in Berlin, Financing in Berlin, Foreclosure in Berlin  |  June 14, 2012 11:46 AM  |  310 views  |  No comments

    For most people in today’s world, their home is their largest asset. As a Real Estate Agent I feel obligated to empower you with the knowledge when it comes to buying or selling your real estate. We all know that the real estate market has had a rough couple of years but clearly thankfully the market in south Jersey and Berlin is recovering. There are 4 ways distressed homeowners car start fresh.

    The first way is to  sell. Believe it or not buyers are out there and prices are rising. Which means that your situations is not that as bad as the past couple of years, banks are moving short sales faster and more efficiently.

    The second way is to settle old seconds and HELOCs. If you lost a home to foreclosure in nonrecourse state and had a second mortgage or home equity line of credit, it is possible that your second is still a lingering debt. The solution would be not to file bankruptcy but after talking with some banks they have informed me that they will settle for unsecured second mortgage or home equity lines of credit for as low as 10 or 20 percent of the outstanding balance.

    The third solution is to check your credit reports and dispute expired derogatoriness. If your short sale or foreclosure was not that as early as 2005-2006, the right thing would be to pull your credit reports and understand how things are being reported and the impact these items are having on your credit store.

    The fourth solution would be to refinance and lock in low rates. With the prices of sales uprising and rates still low, you may have a new chance to refinance a “bad” loan and lock it in.

  • 6 signs a home will hold its resale value

    Posted Under: Market Conditions in Berlin, Home Buying in Berlin  |  April 18, 2012 10:49 AM  |  326 views  |  No comments
    Buying at a low price does have a downside

    Most buyers have a wish list of features they'd like to have in a home. Often missing from that list is how salable the home will be when they later decide to sell.

    Generally, buyers deal indirectly with resale value. They want a home they can buy at market value or less. They want to buy a home that will retain its value. They want to buy a home that will suit their needs. They want to buy a home they can make their own.

    A listing that's priced low to sell fast may be one that will have good resale value only if you use this marketing strategy. The low price may offset an incurable defect, such as a location on a busy street.

    There's nothing wrong with buying a home on a busy street as long as (1) you buy it at a price that reflects the location issue; (2) it suits your long-term needs; and (3) you understand that you will probably have to discount the price accordingly when you sell, depending on the market at the time.

    In a hot seller's market, buyers are desperate to buy. They often overpay, and they are more likely to overlook defects that they would shun in a sour market.

    Resale value has become a bigger issue since the housing recession began five years ago. Buyers are more cautious in their homebuying decisions. They don't want to buy just any home; they don't want to make a mistake and end up wanting to move in a slow market in which they might lose money.

    The homes that hold their resale value well are the ones that appeal to a broad cross section of buyers; offer a good floor plan that works for different lifestyles; have a good amount of space but are not enormous and expensive to maintain; and exhibit a pride of ownership. They should also be in good condition.

    Location is also a critical element of resale value. There are market niches that are always in demand, in both hot and soft markets. For example, there are always buyers for homes in the Rockridge neighborhood of Oakland, Calif., and the adjacent Elmwood neighborhood in Berkeley. Both are conveniently located to shops, cafés and a Bay Area Rapid Transit (BART) stop for easy commuting to work.

    That's not to say that every listing in these areas sells quickly. To sell, it needs to be priced right for the market.

    It's easier to recognize a home with good resale value in the current market than it was in the bubble market of 2005 and 2006 when virtually all homes sold in many areas. In a soft market, the homes that sell within 30 to 60 days are either good homes or good deals.

    Ideally, you want to buy a home that has good resale value. Not one that's just a good deal. There's no urgency to buy now in many areas, although it would be nice to take advantage of record-low interest rates. But you shouldn't buy a home that won't work for you long term just to lock in a great interest rate.

    Even though there are a lot of homes for sale on the market, in many areas there is a not a surplus of quality inventory on the market. One reason for the lack of quality homes on the market is that many sellers are waiting for a better time to sell. Another reason is that homes with good resale value don't tend to change hands that often.

  • Foreclosure activity hits lowest level since Q4 2007 (CHARTS)

    Posted Under: Market Conditions in Berlin, Home Buying in Berlin, Foreclosure in Berlin  |  April 16, 2012 8:35 AM  |  386 views  |  No comments

    RealtyTrac warns distressed-property 'dam ... will eventually burst'

    Foreclosure filings hit their lowest level in more than four years in the first quarter, according to a report from foreclosure data aggregator RealtyTrac.

    Default notices, scheduled auctions, and bank repossessions were filed on 572,928 properties in the first quarter, or one in every 230 U.S. housing units -- the lowest number of filings since fourth-quarter 2007, when 527,740 properties received filings.

    Last quarter's foreclosure activity was down 2 percent from the fourth quarter and 16 percent from first-quarter 2011. March accounted for nearly 38 percent of the quarter's foreclosure activity, with 198,853 properties receiving filings. That was the lowest monthly total and the first under 200,000 since July 2007, the report said.

    On an annual basis, foreclosure activity fell 17 percent in March.

    "The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated," said Brandon Moore, RealtyTrac's CEO, in a statement.

    "There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and nonjudicial states in March.

    "The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen -- both in terms of new foreclosure activity and new short-sale activity."

    States that use the nonjudicial foreclosure process lead the nationwide decline in foreclosure activity, RealtyTrac said. Those 24 states and Washington, D.C., saw foreclosure activity drop 8 percent from the fourth quarter and 28 percent from first-quarter 2011.

    Several nonjudicial states saw significant year-over-year drops in activity in the first quarter: Arkansas (79 percent), Nevada (62 percent), Washington (55 percent), Arizona (41 percent), Texas (31 percent), and California (21 percent).

    By contrast, foreclosure activity rose 8 percent quarter to quarter and 10 percent year over year in the 26 states that mainly use the judicial foreclosure process.

    Judicial states that posted some of the biggest annual increases include Indiana (45 percent), Connecticut (38 percent), Massachussetts (26 percent), Florida (26 percent), South Carolina (26 percent), Pennsylvania (23 percent).

    Source: RealtyTrac.

    Foreclosure starts, which include default notices or scheduled auctions depending on the state, rose for the third straight month in March, up 7 percent from February, though still down 11 percent year over year.

    Foreclosure starts increased on a monthly basis in 31 states, with the biggest jumps in Nevada (153 percent), Utah (103 percent), New Jersey (73 percent), Maryland (53 percent), and North Carolina (47 percent).

    Nevada posted the nation's highest foreclosure activity rate last quarter, with one in 95 units receiving a filing -- a 62 percent year-over-year drop.

    California had the second-highest foreclosure activity rate (1 in 103 units), followed by Arizona (1 in 106 units).

    Top 10 states with the highest foreclosure rates

    Area Foreclosure rate (Q1 2012)
    U.S. 1 in 230 housing units
    Nevada  1 in 95
    California 1 in 103
    Arizona 1 in 106
    Georgia 1 in 119
    Florida 1 in 123
    Illinois 1 in 141
    Michigan 1 in 162
    Colorado 1 in 191
    Utah 1 in 198
    Wisconsin 1 in 206

    Source: RealtyTrac

    California metro areas accounted for 12 of the 20 metros with the highest foreclosure rates in the nationa in the first quarter, including eight of the top 10.

    20 U.S. metros with the highest foreclosure rates

    Metro area Foreclosure rate (Q1 2012)
    Stockton, Calif. 1 in 60 housing units
    Modesto, Calif. 1 in 60
    Riverside-San Bernardino-Ontario, Calif. 1 in 62
    Vallejo-Fairfield, Calif. 1 in 63
    Merced, Calif. 1 in 72
    Sacramento--Arden-Arcade--Roseville, Calif. 1 in 77
    Bakersfield, Calif. 1 in 81
    Las Vegas-Paradise, Nev. 1 in 82
    Phoenix-Mesa-Scottsdale, Ariz. 1 in 87
    Visalia-Porterville, Calif. 1 in 89
    Atlanta-Sandy Springs-Marietta, Ga. 1 in 90
    Fresno, Calif. 1 in 92
    Miami-Fort Lauderdale-Pompano Beach, Fla. 1 in 95
    Oxnard-Thousand Oaks-Ventura, Calif. 1 in 97
    Orlando-Kissimmee, Fla. 1 in 101
    Rockford, Ill. 1 in 104
    Chicago-Naperville-Joliet, Ill.-Ind.-Wis.  1 in 107
    Chico, Calif. 1 in 111
    Prescott, Ariz. 1 in 113
    Santa Rosa-Petaluma, Calif. 1 in 113

    Source: RealtyTrac.

    From start to finish, the foreclosure process took an average of 370 days to complete nationwide, up from 348 days in the fourth quarter -- the highest average in the past five years, according to RealtyTrac.

    Some key states are seeing foreclosure timelines decrease, however. In California, the average was 320 days, down from 352 days in the fourth quarter.


    Colorado, Utah, Massachusetts, Nevada, Michigan and Maryland also saw declines. 


    The five states with the longest foreclosure timelines were New York (1,056 days), New Jersey (966 days), Florida (861 days), Illinois (628 days), and Maryland (618 days). 

  • Misconceptions about 2 common real estate tax breaks

    Posted Under: Home Buying in Berlin, Financing in Berlin, Property Q&A in Berlin  |  April 13, 2012 8:39 AM  |  580 views  |  No comments

    Some homeowners better off not taking home office deduction

    One of the biggest financial advantages of owning a home is the mortgage interest deduction, but the amount many taxpayers submit is often greater than the allowed limit.

    And, while home offices have become more popular because of convenience and the downturn in the economy, many homeowners may be better off not taking the deduction because of the depreciation recapture upon sale.

    Both the mortgage interest and home office topics need to be double-checked before the April 17 deadline. Why April 17 this year instead of April 15? According to the Internal Revenue Service, taxpayers will have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due because April 15 falls on a Sunday.

    In addition, Emancipation Day, a holiday observed in Washington, D.C., falls this year on Monday, April 16. According to federal law, Washington, D.C., holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year.

    Taxpayers requesting an extension will have until Oct. 15 to file their 2012 tax returns. Remember that an extension of time to file is not an extension of time to pay. You will owe interest on any past-due tax and you may be subject to a late-payment penalty if timely payment is not made.

    In a recent column, we discussed the benchmark for the mortgage interest deduction is set at acquisition debt, which is the amount of debt in place when the home is acquired. For example, if you buy a $200,000 home with a $50,000 down payment, your acquisition debt is $150,000.

    Many consumers stay in their homes for years, accumulate appreciation and then refinance to put a child through school, mom into a nursing home or attend a much anticipated family reunion. The new debt on the refinance will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing.

    For example, let's assume your home is now worth $300,000 and you need to take cash out for college tuition. The balance of your loan before you refinance is $135,000 and you take $100,000 "cash back" for a new loan balance of $235,000.

    However, the maximum allowable mortgage interest deduction remains $135,000 -- the acquisition debt, not the bigger number from the refinance.

    Another popular deduction that is often taken yet needs additional consideration is the home office deduction. It's relatively easy for taxpayers to deduct the cost of a home office. To qualify for a deduction, the space must be used exclusively and on a regular basis for either the entire business or its administrative and management activities.

    If you are an employee, additional rules apply for claiming the home office deduction. For example, the regular and exclusive business use must be "for the convenience of your employer."

    A home office deduction is comprised mainly of depreciation, utilities and insurance. For example, if a home has 2,500 square feet and the detached garage now deemed "the office" is 250 square feet, then 10 percent of the utilities and insurance are deductible.

    The actual office depreciation is 10 percent of what would be a depreciation deduction if the entire home were being depreciated for tax purposes. (Depreciation is not allowed on a typical principal residence, so the square footage allotted to "residence" would not qualify.) Supplies and other expenses directly related to the home office are fully deductible.

    However, all these benefits do come at a price. The tax law originally stated that if you sell your home at a gain, any depreciation for a home office will have to be "recaptured." That means that any profit on the business portion is taxable as capital gain.

    On Dec. 23, 2002, the IRS issued new regulations concerning gain on home sales. As long as the home office was in the same structure and not separated from the home, only the depreciation taken for the home office after May 6, 1997, is subject to tax.

    Still, that depreciation recapture amount could be a lot more than you expect. It may be worthwhile to simply work from home and not deem the space a "home office."

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