Is Owner Financing a Good Idea for Home Sellers?

buyers-sellers street signIn this current market, with home prices trending up, but access to financing is more difficult post housing bubble. So, if you want to sell your home, is it a good idea to offer seller financing?

What does seller-financing mean?

An alternative form of financing seen during a seller’s real estate market is owner or seller financing or owner carryback. This means the owner participates in financing the buyer’s purchase of the property, either in whole or in part.

Unlike a traditional bank mortgage where a lump sum is given to the buyer to purchase the home, seller financing means that the seller allows the buyer to make payments directly back to the seller. Most often, the homebuyer signs a promissory note with the seller that outlines the selling price, the interest rate, repayment schedule and even the consequences if the buyer defaults.

In most cases, a seller-financed note is short-term. Since most sellers don’t want to carry a note for 15 to 30 years, the typical note is for around five years with a balloon payment at the end where the buyer secures a standard loan for the remaining balance.

Unless the seller and buyer have an experienced real estate broker assisting him or her in an owner finance, the chances for serious problems arising from the transaction can be significant to both the seller and the buyer.

Is it good for the seller?

Sellers may choose to offer financing for any number of reasons, but some include:

Being able to sell “as is.” If your home requires costly repairs, selling through owner financing may allow you to pass those costs on to the buyer instead.

Potential investment income. Buyers looking for owner financing may be willing to pay a higher interest rate to you than you would receive through any other type of investment. Typically, you must own the home free and clear, and the buyer takes on taxes, insurance and any association dues so all income from the payments goes to the seller.

Opening up the purchase to additional buyers. Potential homeowners that were hit with difficulty during the housing bubble may not be able to get traditional financing even though they are now able to make mortgage payments. Self-employed or contractor may not be able to get favorable loans due to tighter underwriting requirements and may desire purchasing through seller financing.

Some possible pitfalls include what happens if the buyer defaults. If the promissory note is executed correctly, the seller gets the home back along with all of the monies paid to date. At that time the seller is free to sell the home again, but the “buyers” may leave behind damage and the need for costly repairs.

Some things to consider

If you are new to owner financing, make sure to work with a real estate attorney and a professional real estate agent to make sure the sales contract and promissory note fully protect you. There may be tax ramifications to seller financing, so be sure to contact your CPA or tax professional.

The most common problem arising out of an owner finance of a sale to the buyer is when the seller’s loan comes due for payment. Many times the buyer makes a claim that there are problems with the home that were not disclosed by the seller before close of escrow in an attempt to reduce the balance owed on the loan.

Since it is in your interest for your buyer to be able to refinance at the end of the note, offer to report the payments to credit reporting agencies to help build your buyer’s credit score. While individuals typically cannot report directly to these agencies—they have strict lender guidelines—services like Virgin Money can manage and report payments for you to alternative credit reporting companies such as PRBC, that many mainstream lenders now refer to for information on potential mortgagees.

On its face, an owner financing situation seems like a good idea. However, if the transaction is not properly supervised by an experienced real estate brokerfor both the seller and the buyer, many hidden traps may emerge.

If you’re considering selling your home, and wonder about seller financing, talk to us. We can help connect you with professionals to guide you through the process while we market your home.

Tight Inventory Challenges Propel Home Prices

spring home salesA fourth national market report has added to the evidence that winter inventories are extraordinarily—even dangerously—low.  Realtor.com has joined RE/MAX, NAR and Zillow in reporting levels significantly below last year.

The dramatic drop in listings tracked by REMAX echoed findings by NAR, Realtor.com and Zillow that supplies are tighter than they were last year and even two years ago when lack of supply sparked double digit prices increases and bubbles in several California markets

The realtor.com January National Housing Trend Report shows that inventory has decreased 6.7 percent month over month and 8.7 percent year over year.

Sales were also down dramatically from December. the number of home sales decreased 32.1 percent from a robust December and were nearly 5 percent below sales in January 2014, according to the National Association of Realtors. Typically, January closings are lower than those in December. Higher prices, coupled with weak supply, caused an unexpectedly large drop in January home sales.

Most markets are struggling to achieve the proper balance of homes for sale and qualified buyers, said realtor.com.  Low inventory has become a national challenge as homeowners opt to stay put longer—a record 10 years—rather than move up and move on. Most housing markets are appreciating in value as homes sell faster. In fact, prices increased 8.8% in January over 2014, according to the report.

On a year-over-year basis, the Median Sales Price has now risen for 36 consecutive months. Price appreciation is the result of pressure from year-over-year inventory losses. Inventory has dropped by roughly 10 percent for the last three months. There is strong demand, but it is hitting a roadblock in supply. Potential buyers are saying they can’t find a home that meets their needs and/or budget.

We are not seeing enough growth in inventory to support recovering demand Prices will therefore continue to rise in a market when demand outstrips supply. Home prices are beginning to grow at a faster pace again, which is not good for the spring market. Sticker shock was behind weak sales in 2014, but as price gains began to ease, buyers came back. Now prices are heating up again due to severely weak supply.

3 Things You Don’t Want to Hear From Your Realtor

bad realtorYou’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

Set the market value on possibly the largest asset your family owns (your home)

Set the time schedule for the successful liquidation of that asset

Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust. Make sure this is the case.  Be careful if the agent you are interviewing begins the interview by:

  1. Bragging about their success
  2. Bragging about their company’s success

    An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home. Not someone only interested in trying to sell you on how great they are.

  3. “You Know, As it Happens, I’m Also a Mortgage Broker”Some real estate professionals believe it is necessary to supplement their income by wearing a variety of different hats. As anybody who has been through getting a mortgage loan can tell you, it can’t be that much work to print out 99 pages of documents to sign. The trouble is it’s not as simple as it looks, and to be a loan specialist requires a ton of training, experience and knowledge. To avoid a conflict of interest, I advise hiring separate real estate professionals who specialize in their line of work, and do not allow your real estate agent to package your mortgage financing or vice versa.

    You have many agents from which to choose. Pick someone who truly cares.

Chinese Spending Billions on California Real Estate

california real estate marketWealthy Chinese with a few million yuan to burn will spend billions on U.S. real estate in the years ahead, according to a report released Wednesday by CB Richard Ellis, a large global real estate firm.

The United States is the country of choice for China buyers.  Canada and Australia come in next at No. 2 and No. 3 respectively. That rich Chinese individuals and savvy corporations are buying up real estate in world class cities is no surprise at this point.

News of new Chinese real estate deals are popping up every quarter.  Similar moves happened with the Japanese back in the 1980s. Now it’s China’s turn. And by most estimates, they are snatching up high end real estate in Los Angeles, San Francisco and New York, in particular. In California, China is the third largest foreign buyer of real estate, following Mexico and people from the Philippines, according to Realtor.org.  Across the country, however, Chinese purchasers bought over $10 billion of U.S. real estate in 2011 and account for 9% of foreign U.S. house buyers, second only to Canadians, according to Juwai.com, a Chinese real estate website geared towards international home shoppers.

By comparison, and across the 50 states, the Chinese buy more U.S. homes than Indians, Mexicans or the British. While Mexicans are big in California and all across the south, China still ranks within the top five foreign nationalities buying real estate in 44 states.  China, for instance, is ahead of Mexican buyers throughout the more costly Northeast. They already are the number one foreign buyer group in states like West Virginia and Massachusetts. They are number two in New York, Maine, Indiana, Missouri, Colorado, Wyoming and Hawaii.

Companies are starting to cater to this niche globe trotter looking for their dream home. The Chinese are interested in real estate as both investment opportunities and also second homes outside of China. The properties they purchase as their own personal homes tend to be in the $1 million to $5 million range whereas as investment purchases range from $500,000 to $2 million, according to Affinity China.

Residential properties are as hot as commercial ones right now. Home prices in the U.S., coupled with economic uncertainties and tight regulations designed to curb a housing bubble in China, are driving record Chinese investments in the U.S. residential and commercial real estate markets, according to the Asia Society, a multinational think tank with offices throughout the U.S. and Asia Pacific.

What You Need to Know About Your Listing Agent

questions-which-you-must-ask-your-real-estate-agent-1-638Are you thinking of selling your house? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant.

Real estate agents are key to buying or selling a home, but not all agents are created equal.You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one. Having a good rapport and feeling comfortable with the agent is imperative since you’ll have to disclose personal information, like your wish list, finances and timelines. “If you don’t get along with this person and don’t like their style, no matter how good they are, it’s a long process and you want to have a good working relationship with your realtor

Here are the top 5 demands to make of your Real Estate Agent when selling your house:

1. Tell the truth about the price

Too many agents just take the listing at any price and then try to the ‘work the seller’ for a price correction later. Demand that the agent prove to you that they have a belief in the price they are suggesting. Make them show you their plan to sell the house at that price – TWICE! Every house in today’s market must be sold two times – first to a buyer and then to the bank.

The second sale may be more difficult than the first. The residential appraisal process has gotten tougher. Surveys show that there was a challenge with the appraisal on almost 20% of all residential real estate transactions. It has become more difficult to get the banks to agree on the contract price. A red flag should be raised if your agent is not discussing this with you at the time of the listing.

2. Understand the timetable with which your family is dealing

You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan.

This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. Your agent cannot pick the exact date of your move, but they should exert any influence they can, to make it work.

3. Remove as many of the challenges as possible

It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them and their family (commission, length, etc.), don’t expect them to turn into a super hero when they are negotiating for you and your family with the buyer.

4. Can I talk to your three most recent clients?

Talking directly with former clients will give you a better understanding of an agent’s style. Ask whether an agent’s clients are mostly from referrals or repeat business — it’s a sign that clients have had good experiences with the agent.

5. Get the house SOLD!

There is a reason you are putting yourself and your family through the process of moving.

You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. Make sure that they don’t worry about your feelings more than they worry about your family. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you.

How Do I Increase My Home Value?

improve your home chicagoA common question for prospective home sellers is “How can I increase my home’s value or get a higher selling price?” In our earlier articles on this subject, we discuss low budget and economical fixes and upgrades that can increase the perceived value of your home. In this article, we discuss those higher cost items that only give you a high return on your investment if you have high equity in your home or will lose more money if it doesn’t sell quickly.

Many buyers look for a home they can move into immediately. While the specifics depend on the age and condition of your home, here are the priority renovations that increase your home’s appeal and return on investment potential.

  • Kitchen. No matter what the other advantages of your home, if the buyers do not like the kitchen, they are less likely to make an offer. new appliances. New, matching appliances including ovens and stovetops or ranges, dishwashers, refrigerators, microwaves and refrigerators instantly update a kitchen. So, if you are planning major upgrades, head to the kitchen first.
  • Paint, refinish or replace the cabinets. If your cabinets are dated, damaged or dark, consider replacing them or painting them with a lighter, newer version that still fits into the home’s style. If you’ve never painted cabinets, consider hiring a professional since they are more difficult than painting walls, and poorly painted cabinets actually decrease the appeal of your kitchen.
  • Replace countertops. If granite is all the rage in your neighborhood and comparable homes have granite countertops, consider this upgrade. Granite requires professional installation to measure, cut and polish the rock correctly. A less expensive version, granite tile, is easier to install, but has less overall value.
  • Add Upgrade lighting, fans and fixtures to match the style of your new cabinets and countertops.
  • Kitchen floors with carpeting, vinyl or worn and broken tile should be replaced with new ceramic or other tile, wood, or another new product. Make sure you only replace kitchen floors with flooring that can handle the traffic, spills and constant cleaning that a kitchen requires.
  • Bathrooms. No new homeowners want to feel as if they are using someone else’s bathroom. Replace the vanity, sink and toilet. Use low-flow toilets, water-saving faucets and other green products. Replace the floor and shower surround with a neutral tile. If your bathroom has a built-in tub/shower replace it or have it professionally refinished to look fresh and new.
  • Living areas. Carpets harbor dirt, dust mites and stains. Replacing the carpet in major living areas with hardwood increases the visual appeal of your home. As an instant upgrade, hardwood gives your home that updated look. It also attracts buyers that cannot live in carpeted homes for health reasons.
  • Heating, air conditioning and water heater
  • These major home appliances often are out-of-sight and out-of-mind, but a new buyer wants to know they’ll work when they need them.
  • Exteriors. To increase the value of your home, improve the “R” rating and make your home more economical, consider replacing the roof, insulation, siding and windows. If your home has hail or other storm damage, check with your homeowner’s insurance to see if they will cover the replacement. Using better quality, energy-saving products gives your home more curb appeal and buyers know they won’t have to worry about leaks and drafts when weather hits.

Let us help …

We can assess the potential R.O.I. for these and similar upgrades to your home. Call us for an evaluation of your home’s fair market value.

7 Mistakes to Avoid When Selling Your Home

PrintWhen you prepare to put your home on the market, you hope that everything will go the way you imagine and that is your home will sell for over listing price the very first day it goes on the market. The reality isn’t so rosy. Selling your home – especially if you’ve never done it before – can be surprisingly time-consuming and emotionally challenging. Strangers will come into your home and poke around in your closets and cabinets. They will criticize a place that has probably become more than just four walls and a roof to you, and then, to top it all off, they will offer you less money than you think your home is worth.

With no experience and a complex, emotional transaction on your hands, it’s easy for first-time homesellers to make lots of mistakes, but with a little know-how, many of these pitfalls can be avoided altogether. Read on to find out how you can get the highest possible price for your home within a reasonable time frame – without losing your mind. So if you’re thinking of doing any of the following five no-no’s, stop yourself right now.

Mistake No.1 – Getting Emotionally Involved
Once you decide to sell your home, it can be helpful to start thinking of yourself as a businessperson and a homeseller rather than as the home’s owner. By looking at the transaction from a purely financial perspective, you’ll distance yourself from the emotional aspects of selling the property that you’ve undoubtedly created many memories in. Also, try to remember how you felt when you were shopping for that home. Most buyers will also be in an emotional state. If you can remember that you are selling not just a piece of property but also an image, a dream and a lifestyle, you’ll be more likely to put in the extra effort of staging and perhaps some minor remodeling to get top dollar for your home.

Mistake No.2 – Hiring the first realtor you meet.
Selling your home is one of the largest transactions you’ll ever have, so why wouldn’t you interview several applicants to help you? You can ask friends and family for referrals, but there are several questions you should ask. Make sure the agents you interview are experienced selling homes in your neighborhood and the type of home you want to sell. To get the listing, potential agents may employ a number of strategies, including suggesting or agreeing with you to list a high price for your home. Don’t fall for it. Choose the agent who is straight with you, about the market and about your home.

Mistake No.3 – Ignoring the market.
Every market is different and those differences can impact the sales price of your home, the number of days your home spends on the market, and whether your home sells or not. You have to face the reality of market conditions to influence the success of your home’s sale. If home prices are going up, you’ll do well, but it will be more expensive to purchase your next home, unless you move to a less expensive market or home. And if prices are going down, you may not net what you were hoping for, but your next purchase may be a bargain, if you stay in the same area.

Mistake No.4 – Trying to Hide Significant Problems
Any problem with the property will be uncovered during the buyer’s inspection, so there’s no use hiding it. Either fix the problem ahead of time, price the property below market value to account for the problem, or list the property at a normal price but offer the buyer a credit to fix the problem. Realize that if you don’t fix the problem in advance, you may turn away a fair number of buyers who want a turnkey home. Having your home inspected before listing it is a good idea if you want to avoid costly surprises once the home is under contract.

Mistake No.5 – Setting an Unrealistic Price
When your home is overpriced, it’s underdressed for the party. Everyone notices that it doesn’t quite fit in. Buyers who can afford your home quickly notice that your home doesn’t quite measure up to others in the same price range. Buyers who could afford your home if it were priced correctly are unlikely to make offers because they’ll be searching in a different price range.

Mistake No.6 – Not Preparing Your Home for Sale
Sellers who do not clean and stage their homes are throwing money down the drain. If you can’t afford to hire a professional, that’s OK – there are many things you can do on your own. Failing to do these things will not only reduce your sale price, but may also prevent you from getting a sale at all. For example, if you haven’t attended to minor issues like a broken doorknob, a potential buyer may wonder whether the house has larger, costlier issues that haven’t been addressed. Have a friend or agent with a fresh pair of eyes point out areas of your home that need work – because of your familiarity with the home, you may have become immune to its trouble spots. Decluttering, cleaning thoroughly, putting a fresh coat of paint on the walls and getting rid of any odors will also help you make a good impression on buyers.

Mistake No.7 – Skimping on Listing Photos
So many buyers look for homes online these days and so many of those homes have photos that you’ll be doing yourself a real disservice if you don’t offer photos as well. At the same time, there are so many poor photos of homes for sale that if you do a good job, it will set your listing apart and help generate extra interest. Good photos should be crisp and clear, should taken during the day when there is plenty of natural light available, and should showcase your home’s best assets. Consider using a wide-angle lens if possible – this will allow you to give potential buyers a better idea of what entire rooms look like.

Do things right from the beginning and you’ll have a smoother, easier, and more profitable transaction.

Los Angeles High End Home Sales Surging

luxury real estateBy most measures, the housing market these days is a bit sluggish. Prices are flat. Sales are drooping. A lot of people are priced out.

But not everyone. The high end is hopping.

Luxury home prices in Los Angeles continued to soar in the third quarter, posting five straight quarters of double-digit gains, boosted by low interest rates and tight inventory, according to a survey by First Republic Bank.

Luxury home sales in Southern California are hitting levels not seen in decades. The number of homes bought for $2 million or more in recent months is the highest on record. Sales worth $10 million or more are on pace this year to double their number from the heights of the housing bubble.

The value of luxury homes (or homes valued at more than $1 million) in the Los Angeles area jumped 13 percent from the third quarter a year ago and 3.7 percent from the second quarter. The average price for a luxury home in the area hit an all-time high of $2.61 million. The third quarter was strong across most markets from West L.A. to Malibu, prices are very strong and buyer interest is greatest for homes selling for $2 million to $5 million

Low interest rates, a strong stock market and waves of cash sloshing in from overseas are boosting demand for high-dollar homes. A record 1,436 homes worth $2 million or more were sold in the six-county Southland in the second quarter, according to CoreLogic DataQuick.

The biggest difference in the luxury market between now and a decade ago is that the world is smaller. Wealthy international buyers are scooping up second homes, investment properties and safe havens for their cash. And it’s easier for them to scout — and travel — the world to do so.

The Southland scores points with these buyers for its weather, its glamour and a population diverse enough that nearly any transplant can feel at home. And despite its reputation as one of the nation’s least-affordable housing markets, Los Angeles can look like a steal compared with other high-end havens. Private wealth managers around the world think California is a very good market right now, compared to New York or London, L.A. real estate is a bargain.”

But it’s not just foreign money that’s heating up the high end.

A surging stock market has boosted portfolios for domestic buyers in recent years, especially for those who have money to invest. Low interest rates have made mortgages cheap. And banks — still risk-averse — are offering lower rates and better terms to deep-pocketed borrowers than to cash-strapped first-time buyers. Meanwhile, wealthier households have seen their incomes grow faster than average in recent years.

High-end home sales are surging in “Silicon Beach,” too, with tech entrepreneurs and Bay Area transplants scooping up multimillion-dollar homes in Santa Monica, Venice and Marina del Rey. Many of the buyers work in the area and prefer walkable neighborhoods, relatively close to work, to the traditional hubs of Westside glitz.

5 Reasons to Buy a House Now

best-time-to-buy-a-homeThe down payment, interest rate, economic factors, qualification variables can be so confusing. Rising rates, loosening requirements, down payment options, buyer’s market, seller’s market. What does it all mean for you if you want to buy a home? The truth is that while the banks might have a magical formula to determine your mortgage worthiness, determining if the time is right really comes down to three main questions:

Do you want to buy a home?
Are you financially prepared?
Is your credit where it needs to be?

If your answer is yes, then you should take that leap of faith and go for it. Here are six reasons to do it now.

1. Prices are good. In most regional markets, home prices are still gaining, but have slowed. This is good news if you were afraid that big price gains would put homeownership out of reach and also bodes well for your long-term equity once you purchase. Attempting to buy a home when the market is at its lowest point—or to sell at the peak—is tricky. Like trying to time the stock market. ,you might get lucky one or two times, but overall, timing the market does not work. It is all about purchasing power, and that’s a reflection of price and interest rates, which will both be higher in the future.”

2. Rates are low. Mortgage interest rates are still low—for now. A 30-year-fixed-rate loan now averages 4.16%, according to Freddie Mac, but many economists believe we will see 5% rates next year. As interest rates increase, so do your monthly payments. Imagine the unthinkable. paying over 18% interest on a 30-year fixed mortgage.  That was the reality for home buyers in October 1981. The average rate has been 5.18% since the start of this country’s history,” making today’s rates, which hover around historic lows at 4%, sound even better.

3. Loan requirements are softening. It is not quite the look-the-other-way-and-stamp-it-approved levels of 2008, but the overly tough restrictions that followed have loosened. Major lenders are making adjustments, and lowering the minimum FICO score for borrowers applying for loans. You can look to banks that have lowered loan-to-value standards in certain markets for both jumbos and conforming mortgages. For buyers that can mean an easier road to loan approval, even without a ton of money upfront and perfect credit.

4. Fewer buyers around the holidays means less competition. Sellers that are actively looking to sell their homes during the holiday months — namely, October through December — are serious about shedding their residences. This often works in favor of savvy buyers looking to get favorable terms on an aquisition. Having less competition on the buyer’s side can mean lower prices on homes, in addition to fewer counter-offers to compete against.

5. It’s time to move on with your life. The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

How Elections Affect Home Owners

your_vote_counts_button_3One of the very first discussions the Founding Fathers had was about how to balance the rights of all individuals with the rights of those who owned property. They knew that if only property owners could vote, the rights of individuals and minorities might be suppressed … but, if voting extended to non-property owners, the rights of property owners could be unfairly overruled. In the end, they left the question of voter rights to the individual states. Now, nearly 240 year later, with suffrage extended to all citizens, with or without property, the question remains:

“Do elections affect property owners differently than non-property owners?”

Levies

Nearly every municipality imposes property taxes on homeowners for, well, owning homes (and other property). The tax authority typically bases these taxes, or mill levies, as a percentage of the assessed value of the property owned. Proceeds from levies on property fund local services including:

  • Law enforcement
  • Roads, bridges, street lights, and other infrastructure
  • Public schools
  • Emergency services
  • Debris and snow removal

Each locality and school district sets the property tax rates each year to meet the needs of that community. This means that tax rates vary widely from one municipality to another, and even between neighborhoods. They can increase each year, or may even decrease. For homeowners, voting for or against a levy affects property owners in two ways:

The actual tax increase affects a property owner’s bottom line. Yearly property tax increases might push the cost of owning a home higher than the owners plan, or higher than their income can bear. Putting stress on property owners’ financial situation may make it more difficult for them to maintain their property. Homes in distress can bring down the value of an entire neighborhood.

When homeowners vote to increase levies—such as those that provide local services, upgraded roads, improved schools or increased emergency personnel—they are voting to increase the value of their homes and communities, making them more attractive to buyers.

Voting for or against levies is a delicate balance between increasing an owner’s outgo with increasing the property’s value and the community’s desirability. Researching the fiscal impact of the levy you intend to vote on is an important first step in determining how it may affect your bottom line.

Sales Taxes

Taxes based on the sale of goods typically spread the burden of the tax across both property owners and non-property owners. Sometimes, however, a sales taxis for a specific neighborhood or commercial area. If you own property in an area with a higher sales tax rate than one nearby, it can determine how easily you keep your space leased to shop owners since customers may choose to shop elsewhere.

If you are new to home ownership, increases in sales taxes make purchasing furnishings and appliances more expensive. If you are considering upgrades and improvements, renovations or additions, a tax increase may expand your scope costs.

Other Taxes

Taxes specifically affecting homeowners include those like the one embedded in the Affordable Care Act. It taxes the capital gains income of upper-bracket homeowners that sell their home at a sizable profit and even taxes rental income from investment property.

Candidates

Decisions by both national and local elected officials—from state senators to congressional representatives, governors to county commissioners, city council members to school board members—impact the future levies imposed on local property. Knowing your candidates and how they hope to legislate their agenda can affect both your bottom line and your property values.

Not only are elections about national and state officials, international and social concerns or party platforms—they are about local schools, streetlamps, parks and 911 services.

Voting

Do not leave decisions that affect property ownership to others. Take the time to vote in your local and national elections. Balance how a levy can affect your immediate bottom line with the impact it might have on the sale of your property