Some surprises are more than welcome…a sight unseen prospect buying a sight unseen home from photographs you sent her, a new pair of skis for your vacation in Telluride, your pre-K child reading her first word aloud…and some surprises are nightmares…discovering mold in the exterior walls of the condo your client just purchased without having a thorough home inspection by a qualified inspector.

Help your clients NOT be surprised by any of these “hidden” home costs.

  1. Property Taxes – New changes put forth by the Republicans in the 2017 Tax Law and Jobs Act go into effect in 2018. Mortgage interest deductions have been lowered to $750,000 from $1M and property tax deductions are now tied to local, sales, and state tax limits of $10,000.
  2. Home Equity Loans – The new 2017 Tax Law and Jobs Act eliminated all deductions for home equity loans. Additionally, buyers need to consider the number of years they anticipate staying in the home they’re buying. If they move quickly or are transferred out of state by their employer, they may face loss of equity in the house due to fees associated with selling the home. And, if your buyers use financing options such as seller-paid closing costs or financing programs that enable a purchase with a minimum down payment, your buyers may little to no equity in their home for years.
  3. Emergency Reserves Are A Must – Your buyers need to have an emergency fund to pay of emergency and/or unexpected repairs. Even the best home inspectors can only “gauge” the life expectancy of key home components (water heater, HVAC, plumbing, etc.)…they can’t guarantee those life expectancies.
  4. Maintenance Costs – Older/antique homes are beautiful but they require special care and craftsmanship to retain their beauty. Pools and perennial gardens need perennial maintenance. Homes listed in historic registers may require special permission for certain maintenance issues.
  5. Over-Improvement Costs – Know going in to home improvements that the Cost vs. Value Report found that there is a return of $.64 cents for every $1. spent on home improvements. Kitchens and bathrooms tend to generate the best return on investment when selling a home.
    1. Improvements in midrange priced homes that focus on window and door replacements, attic installations and kitchen refurbishing tend to be best ROIs.
    2. Improvements in upscale prices homes that focus on high-end bathroom renovations and opulent master suites, grand entrances, family rooms and multi-story additions tend to be best ROIs.

 

 

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