In order to reap all your tax benefits from buying, selling or investing in a home, careful record-keeping year-round is a must. You should keep all records from the date you acquire the property until no less than seven years after you sell it. (In fact, the IRS can audit you even further back if they can prove you committed tax fraud.)

Your settlement sheet is especially important -- it is an excellent record of your home's initial worth and it documents deductible settlement expenses such as "discount points" you paid to the lender, any prepaid property taxes you credited back to the seller and any initial loan interest payments you made at settlement.

You should also keep proof of payment on items such as legal fees, title insurance, recordation and transfer tax fees and closing costs. Plus, you'll need to document any home improvements you have made (keeping receipts), as many of these costs will reduce your taxable gain on sale.

In addition, old tax returns should be retained permanently as they are often reviewed by creditors or mortgage lenders to determine income history. To find out more about record-retention requirements, contact your professional tax advisor.

Your credit report and history are key to obtaining your home loan. We encourage you to view your credit report yourself, prior to the lender’s viewing of it, by contacting one or all three of the major credit reporting companies: Equifax, Experian, and TransUnion. All you have to do is call and request it. Once you receive it, check the "high credit limit," "total loan," and "past due" columns. It is a good idea to get copies from all three companies to assure there are no mistakes since any of the three could be providing a report to your lender. Fees, ranging from $5-$20, are usually charged to issue credit reports.

Credit reporting companies:

• Experian (800) 682-7954 www.experian.com
• Equifax (800) 685-1111 www.equifax.com
• TransUnion (800) 888-4213 www.transunion.com

You can also get a copy of your credit history at the following online locations:

www.freecreditreport.com
www.creditreports.com

What if I find a mistake in my credit history?
You can correct simple mistakes by writing to the reporting company, pointing out the error, and providing proof of the mistake. You can also request to have your own comments added to explain problems. For example, if you made a payment late due to illness, explain that for the record. Lenders usually understand about legitimate problems.

What about my overall (or FICO) score? What does it mean?
Prior to the late 1990s, credit scoring had little to do with mortgage lending. When reviewing your credit worthiness, an underwriter would make a subjective decision based on past payment history. Then things changed.

Lenders studied the relationship between credit scores and mortgage delinquencies and found a definite relationship. Almost half of those borrowers with FICO scores below 550 became ninety days delinquent at least once during their mortgage. On the other hand, only two out of every 10,000 borrowers with FICO scores above eight hundred became delinquent.

When can I stretch the percentages?
Depending on your area's housing market, lenders sometimes will allow you to stretch their allowable debt ratios. One of the best ways to encourage your lender to do so is to increase your down payment, as indicated in the following chart:

Allowable Monthly Housing Expense

Underwriters sometimes also will stretch the ratios for other "compensating factors," including:

• Strong cash reserves after close of escrow
• A new payment that’s only slightly higher than current rent or mortgage payment
• A history of increasing earning capabilities
• A history of an ability to save money
• A large cash down payment

Lately I've been obsessed with facebook.  If you haven't experienced it yet, let me know, I'll invite you.  You can see what I am doing, what my friends are doing, what my friends friends are doing-you get the idea. 

I feel like I've entered the world of voyeurism.  I never thought I would be so interested in what others were doing but I was wrong.  It's like being addicted to a soap opera.

I especially like the postings by my Realtor friends across America.  They post their new listings, their accepted offers, their successes, new buyers, new sellers, their wisdom and ideas, etc. 

Why should you care?  Because they are all saying the SAME THING-the market is finally picking up.  I don't think it will ever rebound to the fast sale, over priced market we had, but that's okay with me.  I'm just happy to know that so many of us weathered the storm and the sun is poking through the clouds.

So, join me on facebook, share what you are doing with your friends, my friends, my friends friends, etc.  

Smiles,

Kari

West Bend Real Estate Update, April 2009

Statistics show that the spring real estate selling season has begun, at least in West Bend.  Sales and prices of West Bend Single Family homes in March increased from the previous month with the median sales price increasing 4.5% and closed sales doubled, reversing the trend from the previous month.

For the 12 months rolling average ending in March 2009 vs. the previous 12 months, the average price in West Bend for single family homes is up 3.2% according to Metropolitan MLS statistics, an increase from the previous month.  The average price increased from $222,706 to $229,962 and the median price moved up from $192,500 to $198,894 for an increase of 3.3% for the same 12 month period.

At the end of March there were 832 Single Family active listings listed in the MLS for Washington County representing an increase of 180 homes since the end of February.  This raises the supply of homes in Washington County from nearly 9 months to around 36 months.  In West Bend there were 227 Single Family homes available at the end of March, a little less than 10 months worth of inventory, actually very close to the national average.  West Bend has averaged 23 single family homes a month sold in the last 12 months.

For national statistics, please visit our newsletter link.

More good news is that purchasing a home for first time buyers has never been financially easier. First, there are some great deals out there where you can actually purchase a home for thousands less than the current seller paid for it.  Second, asking the sellers to help pay for some of the closing costs is more common than in years past.  Third, the U.S. government will actually give you a tax credit of $8,000, if you qualify.  And finally, you can lock in at an incredible interest rate as little as 4.875%.  If you know anyone who may qualify for this once in a lifetime opportunity, please encourage them to do so.

Finally, the open houses attendance across the area has started to grow.  If you are planning on putting your home up for sale in the next few months, now is a great time to start pumping up that curb appeal.  Email me at kari@kariroehl.com for my free e-Book “450 Ideas To Help Your Home Sell FASTER”. 

Kari Roehl, ABR, CHMS, CRS, EPRO, GRI, SRES, is a sales broker for The Right Address, a boutique real estate company located in West Bend, Wisconsin.   

 Note:  All statistics are courtesy of the Metroplitan MLS

PUBLIC NOTICE- Free ebook "450 Ideas....to Help Your Home Sell FASTER" is now available to the general public as well as clients and friends.  It is in .pdf format (adobe acrobat reader).  Email kari@kariroehl.com  with your request and you will be receive it shortly.  Hope you enjoy another new service brought to you by Kari Roehl of The Right Address.

Whether you are a buyer or a seller, short sales in Real Estate can be a daunting process. 

A "short sale" is when a lender(s) agree to accept less money than what is due to them. It is typically done in an attempt to prevent foreclosure and the costs associated with a foreclosure act.  This can include more than one lender if there is more than one mortgage on the home (i.e. equity, credit line, etc.). 

A lender will only accept a short sale if it makes financial sense to them.  The seller of the home (the borrower) must provide a documentation of hardship, proof of assets and other documents to the lender for consideration.  There could also be tax ramifications because the debt you owed is more than you paid back, the amount that was "short" may be taxable.  See The Mortgage Forgiveness Debt Relief Act of 2007 at http://www.irs.gov/individuals/article/0,,id=179414,00.html

If there is more than one lender, negotiations between all the participants can be time consuming requiring multiple levels of conditions and approvals. 

Also,  the buyer often has to wait for many weeks before they find out if their offer was accepted or not.  It is recommended that the buyer research the property title carefully to ensure there are no other liens on the property that would become the buyers responsibility once the property ownership transfers.   This could include back property taxes among other things.

Because of the complexity of these transactions, they have a high failure rate and very often do not close in time to help the seller avoid foreclosure.  Make sure to enlist the services of qualified professionals to help you through the ins and outs of this difficult real estate transaction. 

STOP BY AND VISIT THE FOLLOWING

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1316 CONIFER AVE $234,900 OPEN SUNDAY 11:30-1:00PM

7198 N RIVER DR $169,900 OPEN SUNDAY 1:30-3:30PM AND MONDAY 4:00-6:00PM

SEE YOU THERE!

but the real estate market in West Bend is still pretty hot.  Statistics tell the tale better than the media or gossip mongers.  The following information is deemed reliable from the Multiple Listing Service and is what real estate agents use in determining values, etc. 

I compared ten years of the last quarter of the year on Single Family homes in the City of West Bend.  I compared number of homes sold, average days on the market, average list price to sale price ratio and average list price.  Guess what I found?  The most significant change was in the price of the homes from year to year.  However, if you average it, it adds up to about a 4% appreciation on your home every year.   On a  $200,000 home that would be almost a $100,000 gain over 10 years time.  Not a bad investment after all, is it?

Even over the last 5 years, it averages out to about a 5% appreciation rate per year.  So, if you purchased your home in 2003 for $200,000, you can expect it to be, on average, worth about $255,250.  Still a pretty good ROI, don't you think?

Contact me if you want to know what is going on in your community. 

Warm Regards,

Kari

Thinking about Thanksgiving and getting together with my family.  I have 2 brothers and 2 sisters, 5 nieces, 1 nephew, my parents, 2 brother in laws, 1 sister in law,  Steves daughter and her fiance and my sister in laws 2 children from a previous marriage. We have grown into quite a large group.  I'd like to share something that has a bit of a tradition in my family that I am sure other families do as well. 

Right before we eat, food sitting in front of us steaming hot, we go around the table and state what we are most thankful.  We go pretty quickly since the food is cooling down, but most of them revolve around health, family, things like that. 

This year I am thankful for quite a few things.  Time  spent with my family, fairly decent health,  my blackberry,  a great pair of shoes, a really nice purse, and of course, super great clients and customers. 

It's always fun hearing from the children's table.   Quite frequently they are thankful for the turkey, the mashed potatoes, the pumpkin pie.  But occasionally you get an unusually profound remark and it hits you upside the head with a great big "AHA".   From the mouths of babes.....

Start your own family tradition this year, or borrow mine.  Just make sure to be prepared before the turkey platter is put on the table!

Kari