Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries.
Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.
Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often.
Increase your income. Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want.
Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 percent down payment.
Keep your job. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.
Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills, too. Pay off the entire balance promptly.
Appraisals provide an objective opinion of value, but it’s not an exact science so appraisals may differ.
For buying and selling purposes, appraisals are usually based on market value — what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.
Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.
Appraised value doesn’t take into account special considerations, like the need to sell rapidly.
Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com
Check references. If possible, view earlier jobs the contractor completed.
Check with the local Chamber of Commerce or Better Business Bureau for complaints.
Be sure the contract states exactly what is to be done and how change orders will be handled.
Make as small of a down payment as possible so you won’t lose a lot if the contractor fails to complete the job.
Be sure that the contractor has the necessary permits, licenses, and insurance.
Check that the contract states when the work will be completed and what recourse you have if it isn’t. Also, remember that in many instances you can cancel a contract within three business days of signing it.
Ask if the contractor’s workers will do the entire job or whether subcontractors will be involved too.
Get the contractor to indemnify you if work does not meet any local building codes or regulations.
Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
Guarantee that the materials that will be used meet your specifications.
Don’t make the final payment until you’re satisfied with the work.
According to Zillow’s 2017, 10 Hottest Housing Markets list, Knoxville, Tennessee ranked #7. The list also revealed that Knoxville’s expected home value appreciation for 2017 will be 4.4 percent, projected income growth will be 1.1 percent and it will have a projected unemployment rate of 4.7 percent.
I have worked for Ferguson Realtors for 16 years and they have promoted, supported and help grow my professional career in real estate. Ferguson Realtors is always on the cutting edge of technology with high quality video, photos, websites and creative ideas in advertising to get homes Sold! Their ethics and integrity, that is the Ferguson name, is also unparalleled in the business. Ferguson Realtors has a personable and friendly atmosphere to work in, while being one of the leading Realtors in the industry. Ferguson Realtors is a company that I am proud to say that I hold my license with and plan to continue my career with for years to come.
Are you considering a career in real estate or a company move? If so; check us out at www.topofknox.com.
When you sell a stock, you owe taxes on the difference between what you paid for the stock and how much you got for the sale. The same holds true in home sales, but there are other considerations.
How to Calculate Gain
Your home’s original sales price when you bought it (not what you brought to closing).
Additional costs you paid toward the original purchase (include transfer fees, attorney fees, and inspections but not points you paid on your mortgage).
Cost of improvements you’ve made (include room additions, deck, etc. Improvements do not include repairing or replacing existing items).
Current selling costs (include inspections, attorney fees, real estate commission, and money you spent to fix up your home to prepare it for sale).
Add the above items to get your adjusted cost basis:
The final sale amount for your home.
The adjusted cost basis figure from above.
Your capital gain:
A Special Real Estate Exemption for Capital Gains Up to $250,000 in capital gains ($500,000 for a married couple) on the home sale is exempt from taxation if you meet the following criteria: (1) You owned and lived in the home as your principal residence for two out of the last five years; and (2) you have not sold or exchanged another home during the two years preceding the sale. You may qualify for a reduced exclusion if you otherwise qualify but are short of the two-out-of-the-last-five-years requirement if you meet what the tax law calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
It’s guaranteed to be hectic right before closing, but you should always make time for a final walk-through. Your goal is to make sure that your home is in the same condition you expected it would be. Ideally, the sellers already have moved out. This is your last chance to check that appliances are in working condition and that agreed-upon repairs have been made. Here’s a detailed list of what not to overlook for on your final walk-through.
Make sure that:
Repairs you’ve requested have been made. Obtain copies of paid bills and warranties.
There are no major changes to the property since you last viewed it.
All items that were included in the sale price — draperies, lighting fixtures, etc. — are still there.
Screens and storm windows are in place or stored.
All appliances are operating, such as the dishwasher, washer and dryer, oven, etc.
Intercom, doorbell, and alarm are operational.
Hot water heater is working.
No plants or shrubs have been removed from the yard.
Heating and air conditioning system is working
Garage door opener and other remotes are available.
Instruction books and warranties on appliances and fixtures are available.
All personal items of the sellers and all debris have been removed. Check the basement, attic, and every room, closet, and crawlspace.