Real Estate Information

Many new home buyers have never lived in a community with an homeowner’s association. Home Owner Associations or HOAs are a regulatory board found in planned communities, gated communities, condominium complexes and subdivisions. A Homeowners association collects fees or “assessments” from individual home owners to cover certain expenses. For example maintenance of common areas, insurance and health or safety improvements.  A HOA also enforces rules and regulations set forth by the developer or property owner.

The Community Association Institute estimates that nearly one out of every six Americans lives in a community association.  Before purchasing a Chapel Hill home that is regulated by an HOA, it is very important to read their bylaws.  These are laws governed by the association. Always ask questions so that you can make an informed decision. Here are a few to help you get started:

• Ask the HOA about parking limitations/restrictions, pet limitations/restrictions with respect to quantity, size and type, restrictions related to outdoor decor/furniture/grilling restrictions (for balcony/patio), and if there are any current outstanding assessments the new owner will be responsible for assuming.
• Be certain to ask if there is any active litigation, as this may affect buyer financing, and also indicates possible red flags with property in general you will want your home inspector to do extra due diligence on.
• If you don't agree with something in the bylaws/restrictions, do you have any recourse?
• What do monthly HOA assessments/fees cover? HOA fees typically cover common ground concerns such as landscaping, pest control, pool and fitness center maintenance, guard gate/security services and common area taxes. They sometimes cover utilities such as trash, water or cable television.
• How often do HOA assessments/fees increase (and at what percentage), so you can be prepared for rising costs down the road?  Also ask, will the members be able to vote on the rising cost?

There are a lot of positives and negatives in becoming a part of a homeowners association.  It may or may not fit into your lifestyle and ideas.  Read the agreement well before you consider a home with a homeowners association.  Ask the homeowners in the community about the services they receive because of the agreement.  The better you understand how all the locals feel about their association, the easier it will be for you to know if it is right for you.  Also you want to know how the association deals with issues that arise. You want to know what you are getting yourself into before you fall in love with the new North Carolina house!

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Happy St. Patrick's Day! Make plans to celebrate today at Kildare’s Irish Pub at 206 West Franklin Street in downtown Chapel Hill. You will see amazing architectural interior and state-of-the-art bar and beer system. More importantly, is their main attraction: the food!

They are open daily from 11:00 am to 2:00 am and have tasty Irish dishes as well as American favorites.  You will enjoy a smoke free environment where your children are welcome until 10:00 pm.  They offer daily dinner and drink specials as well as take-out in Chapel Hill.

For more information visit Kildare’s Irish Pub on the web or call 919-932-7734.

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If you are looking to buy or sell a Chapel Hill home it will be necessary to have the property appraised. The value of the home is a major part in both the buying and selling process. The appraisal has a variety of purposes in a transaction for both the buyer and the seller.  By having an appraisal, it will protect all involved in the sale: the seller, the buyer, the lender and the insurance company.

Most lenders require an appraisal before any financing can be finalized.  So even if the buyer wants to waive the appraisal contingency due to finding a home they want where they have competition, they will still need the appraisal.

It is important to understand that waiving the appraisal can be a dangerous way to purchase a home.  Buyers can lose some of their earnest money if the appraisal does not come in high enough for them to secure financing. Sellers can demand that some of the earnest money be used to compensate them for money lost due to financial losses as well as having to put the property back on the market because the buyer wrote a contract they can’t fulfill.

If you are buying a North Carolina home, it is very important to think it through. You wouldn’t purchase a car without knowing the true value of the vehicle. Purchasing a home should be held to even higher standards, and if you don’t follow these standard practices, it could cost you thousands of dollars.

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Take a leisurely walk on the downtown streets of Chapel Hill and Carrboro starting at The Franklin Hotel, 311 W. Franklin Street in Chapel Hill and do some mouth-watering taste testing as well as receive personal insights from a cross-section of this area’s finest and most unique establishments. You will learn just how unique the streetscapes and local character is, despite their close proximity. 

This novel tour will pause numerous times for sample tastings & personal insights from a cross-section of the areas finest and most unique establishments. With this tour you get to experience both Chapel Hill and Carrboro for the price of one and see why Bon Appetit refers to this area as America's Foodiest Small Town!

You can participate in this fun-filled event on Saturday, March 12^th  for $30 + $2.50 service charge. It is geared for the adults, 18+.  For more information call 919-319-5674.

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Real estate transactions, as exciting as they are, can sometimes be very confusing. It is a serious process that can take an ample amount of time and money to complete. When things seem too complicated it is a good idea to consider a real estate attorney. Below is some valuable information to help you decide whether or not you need to use a lawyer for your transaction.

How can an attorney help me?

A real estate attorney can offer many different services and some may specialize in certain areas but some general services that are typically offered are:

• Reviewing and outlining the real estate transaction process

• Reviewing any listing or agency agreements

• Drafting and reviewing real estate condition reports

• Drafting and reviewing residential offers to purchase and counter offers

• Assisting buyers and sellers through the property inspection and financing contingencies

• Working with title insurance companies and reviewing title insurance commitments

• Checking the settlement statement figures with you prior to closing

• Advising you at closing

There are always questions during this long involved purchasing process, therefore having an attorney available to answer your questions, big or small, will be an added bonus.

What are the costs involved?

The actual cost for an attorney varies by state and by amount of work required. Fee structures also vary (some lawyers charge by the hour, others by flat fee, some by both depending on the task.) but the typical range is $350-$1500.  While it is important to do your research and shop around for the attorney that best fits your budget, don’t let the price factor determine your decision. You may find the worst attorney that is the most expensive or you may find an excellent attorney that offer decent services at a fair price.

Where can I find a reputable attorney?

A good place to start in locating a real estate attorney is to ask for referrals from your local bar association, your real estate agent or your mortgage broker.  Word of mouth has great value as well; ask friends, colleagues and family whom they've had a good experience working with. The Internet is a valuable tool you can use to research also, locate an attorney in your area.

Many people find that purchasing or selling a Chapel Hill home is the most complicated and largest legal transaction they will make in a lifetime. Having your real estate attorney sitting right next to you to watch after your best interests will give a lot of stress relief during this sale time.

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Spring is just around the corner and now is the best time to plan your flower garden! If you love roses and want to incorporate their beauty into your Chapel Hill home, let Witherspoon Rose Culter at 3312 Watkins Road in Durham show you how! And the best part is the class is FREE!

Join them for their free class at 10AM – 11AM on Saturday, March 5^th. For more information visit their website or call them at 919-489-4446.

All classes are held outside, please come prepared for the weather!

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When you are buying a home, condo or other real estate you are most likely going to be asked to make a good faith deposit.  The purpose of this deposit is to establish that you are serious and have the financial ability to complete the purchase.  Now, do not confuse a good faith deposit with a down payment. 

How much do you need to deposit?

That amount is all dependent on the agreed sale price of the property.   Deposit amounts vary and can range anywhere from 1 to 3 percent of the sale price, but there is no set requirement. 

The amount of the good faith deposit is dependent upon the agreed sale price of the real estate. Deposits vary and typically can range anywhere from 1 to 3 percent of the sales price but, there is no set requirement. You typically want your deposit to be large enough that your offer is taken seriously, but you don’t want to give so much that you put your buying power at risk. Chances are there will be no problem, but the smaller amount you have tied up and at risk in a deposit, the better.

Who gets the money?

Typically the earnest money deposit should be made to a reputable third party such as a well-known real estate brokerage, legal firm, escrow company or title company.

As a buyer, be aware that if you allow earnest money to be held and deposited by a seller or by a builder or developer for use in construction, you risk that they will not be able to return it to you in the event the transaction does not close for whatever reason. Most buyers prefer to have real estate agents or attorneys hold the earnest money deposit as  they are licensed by the state and required to deposit the money in a trust or escrow account, this reduces the risk that the monies will be improperly used. To avoid the loss of your deposit, follow these tips.

• Never give an earnest money deposit to the seller.

• Verify that the third party will deposit the funds into a separately maintained trust account.

• Obtain a receipt.

• Ask how the money will be returned if necessary. Do they hold the check until it clears or return it?

Is the money refundable?

Your real estate contract will indicate if your deposit is refundable, so be sure to review this document very carefully. It is advisable that you consult a real estate attorney who can help ensure that your offer is written in a manner that protects your rights to the deposit.  Do your research to get the facts about state law and even local customs on refunds of deposits before your earnest money leaves your hands. Even if your money is refunded, you may not receive the entire amount. Often, third party fees are paid out of earnest money deposits. For example, if an appraisal has been completed on the property then the appraisal fee is going to have to be paid before money can be released to either of the parties. Check the laws in your state  as some states have laws requiring the buyer and the seller to agree on the disbursement of these funds before they are refunded, which can lead to further problems and legal action.

A good faith deposit is a lot like an insurance option for a seller. The escrow process can take 30-60 days, and this can cause the property to already be off the market.  The deposit ideally compensates the seller for this time in the event the buyer is not able to follow through on the purchase of the real estate.  The good faith deposit assures the seller that you are serious about purchasing their home.

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This weekend, make plans to relax and enjoy some wine! Take a walk down Weaver Street Friday evening from 4:30 to 6:30 pm and sample some very delicious wine. You can also get all your wine questions answered! 

Just stop by the Weaver Street Market at 101 East Weaver Street in Carrboro Friday, February 25^th and have a taste!

 You don't have to be a wine connoisseur to enjoy this event! These in-store wine tastings are a great way to learn about wines and to taste before you buy. Pick up a bottle for dinnner, grab one for a hostess gift, or just stock your cellar with wines you know you like.

Do you prefer white or red?

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Buying your first house is likely to be the greatest financial commitment you will ever make. While buying your first home is an exciting experience, it can also seem overwhelming and can leave you asking lots of questions.  There are many things to consider, from budgeting to choosing the house, and getting financing you want to make sure you have all the information you need to make smart decisions. Here are a few easy steps to get started!  

How Much Can You Afford?
Before you can start actually looking for a home, you need to set some basics, such as how much can you actually afford. There are two major factors that you need to consider, how much you can borrow and how much of a monthly payment you can realistically afford.  Keep in mind you will most likely be pre-qualified for an amount that may be unaffordable to your budget. As a general rule of thumb, your annual mortgage payment, taxes and homeowner's insurance shouldn't exceed 28% of your gross income.  Use this home buying worksheet to help you figure the costs.

In addition, you will also need to determine your closing costs, which can add up to 3% to 5% of your total home's value. This closing cost estimator will help to give you a better understanding of the costs.

Do Your Homework-Start Your Search Online
Almost 80% of all home searches today begin on the Internet. With just a few clicks of the mouse, yours can search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and aerial shots of neighborhoods and homes.   With detailed knowledge about neighborhoods, school districts or any other factors that are important to you, you can narrow your search to find your perfect home even before you step foot outside!

How Long Will The Home Meet Your Needs?
When you do find some homes that you are seriously considering, ask yourselves these questions. What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has what you'll need. For example, if you are a young couple with no children just starting out and you found a two-bedroom home that you love, it may be perfect now. However, if you start a family, you will quickly outgrow the space. Best advice is to consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.

What To Look For In First Time Home Loans
Because there are several different mortgage programs available for as a first time home buyer, it can be confusing and difficult to decide what is best for your when faced with many different loan types. Use this list  to help you narrow down the choices to what is best.

In addition, here are a couple of tips and guidelines:
1. Flexibility - Make sure you get a program that offers a monthly payment you can really afford. Be honest with your mortgage broker if your payment seems out of reach. You may be able to obtain a three or five year ARM mortgage with a lower interest rate and lower payments or an interest only loan to get you into your home without giant mortgage payments.
2. Down payment assistance. If you are unable to pay a down payment there are programs available to help you.  Down Payment Assistance Programs  are loan programs designed to assist first-time home buyers with the required down payment and closing costs.
3. Long Term Goal - Are you planning on staying in this home forever, for three years, for five years? Communicate your goals to your lender because in situations like these they may have several mortgage options from which you can choose

Purchasing your first home does take research and work, but buying a home is the American dream and you can fulfill your dreams. While it can be exciting to look at different types of homes, don't be tempted into excess when first time home buying. Don’t purchase a home that is really more than you can afford and you need to be strong and stay within your budget. For more information on all the aspects involved in purchasing a home from start to finish, click here.

Becoming a homeowner means you not only gain a home, but also a lot of tax advantages.  Many of your home-related expenses can be deducted for any type of home: mobile, single-family, townhouse or condos.  Be sure to consult your tax advisor so that you can be sure to find out which deductions apply to you and your home, so that you don’t miss out on any!  Here are some common ones that may be beneficial to you.

Deducting Loan Points Paid on a Purchase or Refinance

The points you pay on a loan for a home purchase are tax-deductible for the year you made the purchase. You can deduct the points you paid as well as those a seller paid on your behalf if you meet the following criteria:

• The loan is secured by your primary residence
• The loan was used to buy, improve or build the home
• Paying points is a common practice in your geographic area
• The points are calculated as a percentage of the loan principal
• The points are clearly outlined on the settlement statement; and the amount of cash you put into the purchase of your home (down payment,   closing  costs  etc.) is at least equal to the amount you were charged for the points you paid on the loan.

Deducting Real Estate Taxes

Real estate taxes are deductible in the year they were paid. They are generally reported on Form 1098, Mortgage Interest Statement, the annual statement from the financial institution holding your mortgage, or on your county real estate tax assessment statement. You should also deduct any prorated taxes collected from you at closing. These amounts are not always included on Form 1098, but may be itemized on your real estate closing statement.

Casualty or Theft Loss

If your home is damaged from a sudden, unexpected event such as a fire, a storm, vandalism, or theft, the loss that is not covered by insurance is deductible subject to a $100 reduction and a 10% of adjusted gross income limitation. A deductible casualty or theft loss reduces the cost basis of your home by the amount claimed as a deduction. The deductible loss is calculated using Form 4684, Casualties and Thefts, and carried to Schedule A as an itemized deduction.

Going Green Means Tax Benefits

Homeowners who make their homes more efficient with energy-conscious purchases may be eligible for tax benefits. A recent tax law change provides a tax credit to improve the energy efficiency of existing homes. The law provides a 10 percent credit for buying qualified energy efficiency improvements. To qualify, a component must meet or exceed the criteria established by the 2000 International Energy Conservation Code (including supplements) and must be installed in the taxpayer’s main home in the United States.

The following items are eligible:

• Insulation systems that reduce heat loss/gain

• Exterior windows (including skylights)

• Exterior doors

• Metal roofs (meeting applicable Energy Star requirements)

In addition, the law provides a credit for costs relating to residential energy property expenses. To qualify as residential energy property, the property must meet certification requirements prescribed by the Secretary of the Treasury and must be installed in the taxpayer’s main home in the United States. The maximum credit for all taxable years is $500 – no more than $200 of the credit can be attributable to expenses for windows. Read more from the IRS on how you may be eligible to receive this tax break.

Each case is different and it is possible you will actually qualify for other deductions you were unaware of, so check with your tax professional so they can help you get the best return! For information on taxes and being a homeowner, visit the IRS where you can learn more about Tax Information for Homeowners.

Tax season is here, as a homeowner you taking advantage of any tax breaks this season?

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