New Homes Are Getting Smaller

DAILY REAL ESTATE NEWS | MONDAY, NOVEMBER 27, 2017 Developers are continuing to shrink the size of new single-family homes, according third-quarter housing data compiled by the National Association of Home Builders. The median square footage of a single-family home was 2,378 square feet in the third quarter. In the years following the Great Recession, builders were focused on the higher end of the market, catering to larger-sized homes. But more recently, builders have renewed their focus on the entry-level market, and NAHB predicts square footage of new homes to continue to decrease. “Typical new-home size falls prior to and during a recession, as home buyers tighten budgets, and then sizes rise as high-end home buyers, who face fewer credit constraints, return to the housing market in relatively greater proportions,” NAHB explains at its Eye on Housing blog. “This pattern was exacerbated during the current business cycle due to the market weakness among first-time home buyers. But the recent declines in size indicate that this part of the cycle has ended, and the size will trend lower as builders add more entry-level homes into inventory.” Source: “Declining New Home Size Trend Continues,” National Association of Home Builders’ Eye on Housing blog (Nov. 17, 2017)

This Is How Fast a Home Sells Today

DAILY REAL ESTATE NEWS | TUESDAY, NOVEMBER 28, 2017 Homes today spend a median time of three weeks on the market—far shorter than the median of 11 weeks five years ago, according to new data from the National Association of REALTORS®. “The inventory shortage and the growing economy and job creation has increased the interest in home buying,” says NAR Chief Economist Lawrence Yun. “There is just not enough inventory; people need to fight over the few homes available on the market.” Historically, about 1.2 million new homes are built every year, but this year, only about 800,000 have been constructed. “It’s been below that in prior years, and in the past decade, greatly lower than that,” Yun says. “Today’s shortage is largely explained by a decade of underproduction.” Some markets are so hot that even three weeks is too long for a home to sit. “If we make it three weeks in our market, there is something wrong,” Boston-area real estate agent Darlene Umina told CNNMoney. “These days, you know within the first weekend whether the price was right.” Umina says she hosted an open house earlier this year that resulted in 18 offers on the home. Three of those offers were cash. In San Francisco, real estate pro Erin Thomas says she’s had buyers arrive at open houses and submit an offer on the spot. She also says offers above the list price and without contingencies are becoming more commonplace. Source: “This Is How Long it Takes to Sell a House,” CNNMoney (Nov. 27, 2017)

Millennials: We Don’t Want to Be Renters

DAILY REAL ESTATE NEWS | TUESDAY, NOVEMBER 28, 2017 Though many are stuck renting out of financial necessity, millennials show the same desire for homeownership as their parents and grandparents—and traditional suburban properties appeal to them more than renting or buying in cities, Bloomberg reports. Many economists have acknowledged that the slow path to homeownership for young adults is contributing to record-low homeownership rates. But for two consecutive quarters, the homeownership rate among those ages 35 and younger has been on the rise. Some economists predict that millennials will eventually own homes at similar rates as their parents. Rents, however, are taking a bigger bite out of household budgets, making it difficult for young adults to save enough for a down payment. Student loan debt is also delaying homeownership by up to five years, according to a 2016 study by the National Association of REALTORS®. Millennials also have less job security than prior generations, and their careers are more likely to require relocation. “You go back 20 or 30 years, people would get a job in their late 20s, early 30s, with the idea that they might work there until retirement,” Dean Baker, codirector of the Center for Economic and Policy Research, told Bloomberg. “People aren’t in that boat today.” Young adults who are ready for homeownership are also facing a shortage of homes in the market. “The result is that price gains continue to exceed income growth through scarcity, particularly in that smaller home market, which is the hardest market for a builder to essentially reach and build to these days,” Robert Dietz, chief economist at the National Association of Home Builders, told Bloomberg. Overall, though, economists seem to be upbeat about millennials. They’re getting married and having children later than their parents did, but they are starting to “cross barriers typically associated with buying,” Bloomberg reports. “Right now, probably a third of our housing business is young couples coming out of the apartments,” Chris Nelson, a builder in Simsbury, Conn., told Bloomberg. “We really think that’s just the beginning—that over the next three to five years, we’re going to see a ton of people coming out of the apartments, buying homes.” Source: “Millennials Want to Own Homes Too, if U.S. Economy Would Consent,” Bloomberg (Nov. 26, 2017)

DAILY REAL ESTATE NEWS | WEDNESDAY, NOVEMBER 29, 2017 The front porch—a classic feature of American homes—is making a comeback but with a twist.

The Front Porch Is in Demand Younger crowds are literally turning porches into stages. “Porchfest” is growing in popularity across the country, in which neighborhood music festivals pop up that are enjoyed from homeowners’ front porches. The Atlantic Monthly’s CityLab reports: “In the Instagram age, the front steps have become places to see and be seen, throw a rocking concert or party, and to foster metropolitan community in a walk-by, stop-in-for-wine sense.” Read more: Welcome Back the Front Porch Shelley Glica in Niagara Falls, Ontario, told CityLab how she organized a Porchfest in her community and how in warmer months she’ll also host a “Stories From the Porch” series of speakers on art, history, and culture. Glica and others represent a generational rethinking of the front porch, CityLab reports. Porches are growing in demand across the country. Twenty-three percent more new homes are being constructed with a front porch than two decades ago. The number of new homes built with porches was at 65 percent last year, according to the National Association of Home Builders. In the Southeast, that figure jumps to 86 percent. An NAHB survey from 2016 also shows that millennials—more than any other age group—say they want a porch. The front porch was once a celebrated signature of Federal architecture. In the 1800s, past presidents had launched successful front-porch political campaigns. For homeowners, front porches were a place to do chores, such as shuck beans, or to get fresh air on hot days before air conditioners. But once air conditioning was invented, Americans showed less need for cooling porches in the middle of the 20th century. The invention of televisions also pushed homeowners inside more. Nowadays, younger generations are finding the porch can be an enjoyable hangout spot. Scott Doyon, who organized a Porchfest in the Atlanta area, says the front porch is now being used as a place to host friends over for hors d’oeuvres or even sharing a concert on Instagram or other social media. “I try to find ways to plug those old ways of living into the modern world,” Doyon says. “I still believe in the value of porches as a conduit to community-building—it just unfolds in a different way now.” Source: “America Rediscovers Its Love of the Front Porch,” CityLab.com/The Atlantic Monthly (Nov. 20, 2017)

How Neighborly Are Americans? Not Very

DAILY REAL ESTATE NEWS | THURSDAY, NOVEMBER 30, 2017 Nearly 30 percent of Americans admit they don’t know their neighbor’s first name. But at least 90 percent have smiled or spoken to their neighbors—at least once, according to a new survey of more than 1,000 Americans released by Safehome.org, a home security systems review resource. Fifty-three percent of Americans say they’ve introduced themselves when a new neighbor initially moved in, but they won’t likely become best buddies. Only a fraction of Americans—34 percent—say they’ve been in their neighbor’s home or vice versa, and only 16 percent have hung out with neighbors outside of the neighborhood. Baby boomers tend to be the most neighborly generation, according to the survey. Sixty-seven percent of baby boomers said they’ve spoken to their next-door neighbor frequently, while only 36 percent of millennials have said they’ve done the same. In a look at neighborly behavior across ethnic lines, Asian-Americans were found to participate the least among in neighborly reactions at 39 percent, followed by Hispanic participants at 40 percent. Caucasians and African-Americans performed more neighborly reactions—such as smiling and chatting—at 49 percent and 46 percent, respectively. Sixty-three percent of all respondents reported not often speaking to neighbors of a different race. “Knowing your neighbors doesn’t just extend your social circle—it can also have a good effect on your mental and physical health and increase the security of your home,” according to the Safehome.org report. “You may even have a friend, partner, confidante, or baby sitter living next door that you never even knew existed.” Source: “A Nation of Neighbors,” Safehome.org (November 2017)

Charity Deduction Faces Same Tax Reform Risk as MID

Of all the itemized deductions, the one for charitable contributions might seem to come out the best under tax reform. That’s because it’s the only deduction under both the House and the Senate versions of the bill that is largely undiminished. And yet charities complain donations will dry up under tax reform. What gives? b“Provisions in the tax bill the House and Senate are considering would make the situation worse” for charities, Ray Madoff, director of the Boston College Law School Forum on Philanthropy and the Public Good, says in a Nov. 27 New York Times opinion piece. The problem, Madoff says, is the near doubling of the standard deduction. With all of the other itemized deductions either going away or constrained by new caps, most households will opt for the standard deduction rather than continue to itemize. That renders the tax deduction for charitable giving nearly meaningless. As Madoff puts it, “A vast majority of American taxpayers would no longer itemize and therefore would receive no benefits for their charitable giving.” That argument might sound familiar. It’s the same one NAR is making about homeownership. Under the Senate bill, the mortgage interest deduction would be left intact, but the deduction for state and local taxes would go away. In the House, MID would be limited to mortgages of $500,000 and the deductions for property taxes would be capped at $10,000, while the deduction for state and local income and sales taxes would be entirely repealed. So, while MID is preserved, either entirely or in part, very few households that itemize today would continue to do so. As a result, MID would continue to be a benefit only for the wealthiest households. Given the structural changes to the tax code lawmakers have before them, preserving the deduction for charitable contributions is mostly meaningless. This is exactly the same thing REALTORS® are saying about tax incentives for homeownership. They’re meaningless for most households if tax reform passes in its current form in both the House and the Senate. More on tax reform’s impact on homeowners in The Voice for Real Estate.

Largest part of La Honda preserve now open

Midpen Open Space District welcomes visitors to 2,100-acre cattle grazing site In an effort to preserve picturesque cattle grazing grounds, commemorate times past and enhance recreational opportunities, a new section of the bucolic La Honda Creek Open Space Preserve is now open to the public for the first time. Starting Friday, Dec. 1, the Midpeninsula Regional Open Space District is welcoming visitors to a 2,100-acre lower section of the nearly 6,100-acre preserve along the hillside overlooking the coast. Only a smaller northern portion of the site is currently open to the public so long as they request a permit in advance. Now, a new 6-mile trail, parking lot and free access from dawn to dusk will be offered to hikers and equestrians, said district spokeswoman Cydney Bieber. The Lower La Honda Creek Open Space Preserve will also mark Midpen’s second area that blends cattle grazing alongside recreation. The move continues long-standing ranching traditions on the coastside that support management of healthy grasslands, she explained. “We’re becoming increasingly distant from where our food comes from and the historic use of the land. This land had been used for generations and generations for ranching. This is an opportunity to see what that looks like,” Bieber said. Midpen’s $1.2 million project included creating a new 22-space parking lot where the trailhead meets at Sears Ranch Road. The six-mile trail stretches through forests, creeks and ranchlands with panoramic views. Preparing the site included installing informative panels, preserving habitat and restoring a pond, she explained. The expansive hillside is home to the threatened California red-legged frog and potential habitat for the endangered San Francisco garter snake. Part of the site also encompasses the San Gregorio watershed and Midpen will be able to help preserve clean water for that coastal area, Bieber said. Hikers can park off Sears Ranch Road and meander along the trail that is primarily out and back. A small section known as the Folger Ranch Trail creates a loop at the end of the path but will close seasonally due to weather. Equestrians can apply for a free permit to park at a different lot before taking a 1.2-mile trail into the preserve to meet up with the main Harrington Creek Trail, Bieber said. The work was supported by Measure AA, a $300 million general obligation bond approved by voters in June 2014. The measure levies a property tax on those in the special district’s territory, which includes 17 cites in San Mateo, Santa Clara and Santa Cruz counties. With development pressures abounding, the ability to preserve 2,100 acres of open space is a unique opportunity. The achievement was celebrated Thursday with a ribbon cutting ceremony leading up to Friday’s opening of the largest section of the preserve for the public to enjoy. The vast grassy hillside is grazed by a local rancher who received a contract with Midpen in 2014 to move his cattle along the property. Midpen acquired the site in 2006 for $9 million from the Peninsula Open Space Trust, she said. While the cattle aren’t expected to be interested in visitors, Midpen is encouraging the public to appreciate them from a distance and hikers must remain on the trail. The site was once managed by the Driscoll family for generations and used for cattle grazing, Bieber said. “Our goal, especially with lands in the coastal areas, is to make sure we’re able to maintain historic usage of them, which is why this preserve will have active cattle grazing,” Bieber said. “That’s really important to us to maintain those agricultural uses that have been used in the past.” In 2012, Midpen approved a 30-year master plan for the La Honda preserve and is striving to make improvements to open more of the entire coastal property to the public. As studies show spending time in nature has immense benefits for a person’s well-being, Bieber said preserving lands for recreation is vital to the community and the planet. “These open space lands are the life support system of the planet. They provide clean air, they provide clean water, they provide a place for people to get away from their hectic lives and convene with nature,” she said. “Our preserves are one of the places in the Bay Area where people can do that, they can get away, they can experience the land around them and how it used to be used for many years.” Visit openspace.org/preserves/la-honda-creek for more information. samantha@smdailyjournal.com (650) 344-5200 ext. 106 Twitter: @samantha_weigel

Last Minute Holiday Gift Ideas

Holiday shopping can be a source of stress for anyone, but particularly for procrastinators. Need some last-minute gift ideas? Think about readily accessible, yet thoughtful items that don’t require a lengthy shipping process. Let these five ideas help solve your eleventh-hour gift-giving woes. 1. DIY-It. DIY gifts can be heartfelt, and many items can be made in a pinch. Bake a tray of Christmas cookies and tie them up with a bow; make seasonally scented homemade candles; or knit a scarf. The possibilities for crafty folks are endless. 2. Get Accessorized. Don’t get stumped. Consider a classic fashion accessory, such as a Casio Vintage Watch, which can be found in many national retailers, in a range of affordable prices. Functional and fashionable, these water-resistant timepieces that feature both an alarm and stopwatch will complement an array of style preferences. 3. Head to the Box Office. Quickly check the schedule of your gift recipient’s favorite band, team or theater company for tickets to an experience, such as a musical, concert or game. This thoughtful gift can be purchased and received in an instant, thanks to e-ticketing. 4. Pamper Them. The holidays are stressful. Help your loved ones unwind during a busy time of year. Consider a gift certificate for a spa or beauty treatment somewhere local to your recipient. The gift can be enjoyed exactly when it’s needed most. 5. Let Them Pick. When you’re really in a pinch and you’ve waited until the last minute, don’t stress. A gift card can be a great way to show you thought of someone, without having to spend too much time or energy in search of the perfect item.

What tax reform could do to your mortgage interest deduction ROBIN SAKS FRANKEL

Taking a mortgage interest deduction at tax time has long been touted as a means of encouraging homeownership, but soon you may no longer able to. Under current law, homeowners can itemize and deduct the interest paid on their mortgages up to the first $1.1 million, if their loan is used to buy or improve a first or second home. The Tax Foundation says this is the third-most popular itemized deduction, and real estate industry professionals say it’s a much-needed incentive to encourage homeownership. But with the Republican tax reform bill on brink of passing Congress, the mortgage interest deduction may be changing soon, and it could have major implications for your taxes. What they want to change The version of the Tax Cuts and Jobs Act passed by the House reduces the amount of mortgage interest that can be deducted from your taxes from the first $1.1 million of your loan to the first $500,000. It also would put an end to allowing a mortgage interest deduction on a second home, which the current law permits. Advocates for these changes say it will encourage more people to use the standard deduction, which the new plan aims to increase, and thus simplify things at tax time. Homebuilders and realty associations decry these changes, saying that it will discourage homeownership, which in turn could have a negative financial impact for many. “Our major concern is less incentive to buy a home, which could mean lower homeownership rates in America,” says Lawrence Yun, economist for the National Association of Realtors. “Given that home values have always provided an opportunity to build wealth, we may see greater wealth inequality in the future.” What this change could mean for you If the House’s version takes hold, halving the mortgage interest deduction is more likely to benefit future homebuyers in less expensive areas. But in major metropolitan areas, homes under half a million dollars are harder to find, and the change is likely to penalize those who can afford pricier housing. The Senate’s version of the act, which is still being ironed out, mirrors the current rule, allowing for a deduction on the first $1 million in any debt used to buy, build or make a significant improvement to a main or secondary home. The biggest change in here is that if you refinance your mortgage, the interest in that debt won’t be eligible for a deduction. This version is less likely to disrupt the status quo. Geographically skewed In 2017, nearly 10 percent of all purchase loans were over that $500,000 threshold. That works out to about 215,000 purchase loans so far in 2017, according to Daren Blomquist, senior vice president of ATTOM Data Solutions. If you’re in the market for a home, you’ll probably be in the 90 percent who spend under the threshold. But that will depend on where you live. “It will disproportionally impact certain areas. Certain homeowners need to be cognizant of this,” says Blomquist. For example, most major metropolitan areas and coastal regions are pricier to live in than other parts of the country and are less likely to have homes priced under $500,000. Blomquist cites California as an example, where as many as 31 percent of the mortgage loans in the state are for amounts above that $500,000 threshold. Is this a big deal? Although real estate groups and the home-building industry have argued vociferously against changing the mortgage deduction, it’s likely that any change isn’t going to make or break your decision to purchase a home. “I don’t think it’s going to affect how consumers are going to buy homes whatsoever,” says Michael Seward, owner/broker of a real estate company in Palmer, Massachusetts. “When people buy a home they don’t do so because they’re getting a mortgage deduction.”

Choosing A Mortgage Broker Or Lender

Deciding on where to secure financing and the type of financing to use to purchase a house is one of the most important steps of buying a house. The article explains the difference between a mortgage broker & mortgage lender. A mortgage broker is a middleman between a potential borrower and mortgage lenders. Mortgage brokers help potential borrowers secure the best type of mortgage and rates. A mortgage lender is an actual organization who provides the funding for the purchase of real estate. An example of a mortgage lender includes credit unions or banks. Ask For Referrals / Recommendations. Turn to family, friends, and colleagues for recommendations, as well as ask a real estate agent. An experienced buyer’s agent will have access to several brokers or lenders they’ve worked with in the past and had positive experiences dealing with. Research Mortgage Brokers Or Lenders Online. A great tip for finding and choosing a mortgage broker or lender is to research potential companies online. The author offers the websites which provide reviews from previous customers which can be very helpful to a potential buyer. They are Facebook, Google Business, Yelp, Better Business Bureau, Trust Pilot, and Zillow Learn About Mortgage Brokers’ Or Lenders’ Products. One of the top tips for finding and choosing a mortgage broker or lender is to learn about the products they offer. Each and every mortgage broker or lender will offer different types of mortgage products. Since every home buyer’s circumstances are different, it’s vital they find the best mortgage product. Understand What Fees Are Charged. Before completing a mortgage application with a mortgage broker or lender, it’s critical to know exactly what fees are charged. The article gives some of the most common mortgage fees to be on the lookout for. They are Appraisal Fee, Rate Lock Fee, Application Fee, Origination Fee, Processing Fee and Underwriting Fee. Ask The Right Questions. Asking the right questions when talking with prospective real estate agents is always highly recommended. Home buyers who know the right questions to ask real estate agents when buying a home will have a better experience than those who don’t. If a mortgage broker or lender struggles to answer these questions quickly, you may want to shop around and talk with a couple of other brokers or lenders.

Mistakes Made By Home Owner When Selling

5 mistakes made by the sellers, offers to take the tips to heart, which will help to sell your home for top dollar. #1 Do a Research Before Listing A Home For Sale – Conduct your research online, as the big part of potential buyers for your home are online. It is not enough to have a friend tell you they liked working with Agent “X.” Instead, go out and see what people are saying about that agent. This is what the author offers. #2 Hire A Rookie To Be Their Listing Agent- In author’s opinion, you don’t need an agent to sell your home, just put a sign in the yard. But if you want top dollar, you need an agent with a marketing plan. #3 Do Not Demand Professional Photography- As most buyers are looking at homes online before choosing which ones to see, it is important to have photographs with high quality. #4 Make The Showing Process Complicated- Whether it’s a buyer’s market or a seller’s market, a homeowner will fare better in the competition, if the home can attract multiple buyers. Making your home available at all reasonable times is an inconvenience, but it’s a very profitable inconvenience for the home sellers that do it correctly. #5 Fail To Hold Their Agent Accountable- Do not tolerate a poor level of service. If you do not hear from your listing agent on a weekly basis, the author advises to pick up the phone and call their boss. Demand your money’s worth!

Selling an Older Home? Budget-Friendly Ways to Help It Compete Well With Newer Homes

For those who own and enjoy living in an older home, it can be disappointing to discover that many buyers, especially younger ones, often shy away from these stately beauties. Even when an older home offers features that are hard to find in newer construction, such as large pantries, plenty of storage space and large rooms with high ceilings, it can still lose out to newer homes that offer more open floor plans or more light. Owners of older homes who want to help their homes compete more effectively with newer construction homes can use the following tips to help level the playing field and score the sale! Conduct a Pre-Inspection to Find Lurking Issues Buyers who love the thought of living in an older home but hesitate to purchase one due to concerns about maintenance costs may be persuaded to change their minds if the sellers are willing to add something extra to the deal. One effective tool that sellers can use to help convince buyers that an older home is sound is to have it pre-inspected. If the pre-inspection report finds the home has a repair or condition issue, sellers can include documentation to show what they did to resolve the issue. This type of home pre-inspection will typically cost sellers a few hundred dollars, depending on the size and design of the home. To get an exact cost, sellers can ask their real estate professional for local home inspection prices and referrals to a reputable home inspector in their area. Once the inspection has been completed and any necessary repairs attended to, the sellers may want to ask their listing agent to use the pre-inspection notice and resulting documentation as part of their marketing to help encourage buyer interest. Gift Buyers with a Home-Warranty Plan Another relatively low-cost way for an older home seller to help encourage interested buyers is to offer a home warranty plan as a buyer incentive. Most home warranty plans cover: Systems in the home, including electrical, HVAC, and plumbing Large appliances, such as the refrigerator, hot water tank, and laundry appliances Additional coverage options for hot tubs, pool equipment, well pumps, and other features Alternative seller coverage while the home is under contract Home warranty premiums and levels of coverage vary by company. Sellers who are interested in purchasing a home warranty plan as part of their marketing strategy should discuss their plans with their listing agent. Their agent will be able to help them find a reputable warranty company and choose the best policy for their situation. Consider Repainting the Interior A common reason buyers give when deciding not to buy an older home is because they felt the home's interior was dark or dreary, when compared with newer homes that have a more open floor plan or larger windows. A cost-effective way for sellers to remedy this problem is to consider repainting the interior of the home in a lighter color. By using the same color throughout the home for the walls and adding an even lighter shade for woodwork and trim, the home will have more continuity, making it seem lighter and more attractive to today's active buyers. Maximize Lighting and Minimize Window Treatment Sellers may also want to make changes in the lighting to make the interior of the home feel lighter and more inviting. To this, sellers can start by replacing existing light bulbs with newer, brighter ones that offer a natural light. Adding additional lamps and situating mirrors to maximize the light sources in the home can also be effective in brightening up the interior of an older home. If the home has heavy draperies or dark window treatments, replacing them with sheer panels or allowing some windows to go bare is another excellent way to bring more light into the home. For more ideas on making an older home compete more effectively with newer homes in the local real estate market, sellers should consider asking their listing agent to show them an older home in the area that is attracting plenty of buyer attention or has recently gone under contract. Viewing it may provide additional ideas that sellers can use to make their home more saleable. The listing agent can also help sellers identify problems by touring the home and pointing out areas that need additional lighting or some other improvement to help attract and retain buyer interest.

4 costs you haven't factored into your homebuying budget

It's not cheap to buy a home these days, and we're not just talking about the price of the home itself. Other out-of-pocket costs that crop up during the purchasing process, or even when you're moving in, can put an unexpected strain on your already-hurting bank account. For starters, you'll need to budget between 2% and 5% of the home's purchase price for closing costs, including appraiser, lender, and title fees. New regulations passed last year mean lenders have to be more transparent about these fees, and (as long as you read your closing documents) you should have a relatively good idea of what they'll be when your lender makes you an offer. Powered by SmartAsset.com SMARTASSET.COM Unfortunately those closing costs only make up a portion of the added expenses you'll face. Nearly half of homebuyers incurred more than $2,000 in unexpected charges during the homebuying process, according to a recent survey by TD Bank, and 10% spent at least $5,000 more than they expected. "Most people just look at the sticker price of the house and the mortgage payment," says Svenja Gudell, chief economist at the housing site Zillow. "But there are a lot of additional costs that can shock first-time homebuyers." 1. The inspection Once you've made an offer on a property, you'll usually need to pay an inspector a few hundred bucks to give the home a once-over. If he finds any potential problems -- structural issues or asbestos, for example -- you may have to pay another specialist to come in and offer a professional assessment. homebuying costs magnifying While it can be tempting to skip the inspection to save cash (or to make a more attractive offer to a seller), it's worth the outlay to get peace of mind that the home is in good condition -- or negotiating ammo to make sure the price reflects the necessary repairs. "It's money well spent," says Cindy Hamann, chair of the Houston Association of Realtors. 2. Bringing cash to the table Homebuyers are also often surprised with the extra cash -- beyond closing costs -- that they need to spend at the closing table. Many lenders require you to pay a year's taxes and mortgage upfront. If the seller prepaid any taxes or homeowners association dues, you'll have to pay her the prorated amount for the rest of the year or quarter. "Once you're done with all the fees and the deposits for reserves, you may end up bringing many more thousands of dollars than you thought to the closing," says Keith Gumbinger, vice president of HSH.com. 3. The move Once you've officially closed, you'll need to pay for the move itself. That cost will vary considerably depending on where you live, how far you're moving, and how much stuff you'll need to haul. In general, though, expect to pay at least a few thousand dollars for professional movers. homebuying costs men It's easy to overpay for movers, so get quotes from a few companies, and hire someone who's licensed by the Federal Motor Carrier Safety Administration and has good reviews online (even better if you can get a referral from a friend). 4. Immediate costs While you may be able to put off renovations or furniture purchases, there are some costs that new homeowners face right away. You'll likely want to hire a locksmith to change the locks, for example, and there could be deposits or setup fees for getting your utilities started. As a new homeowner, you'll also now be on the hook for both routine, and unplanned maintenance costs on the home. Experienced realtors say you should expect something to break or need replacing within your first year. Set up an emergency savings account with at least six months of expenses that you can tap if your roof springs a leak or the heater suddenly stops working. That way you won't have to turn to credit cards to cover the unexpected, and you can spend some time enjoying your experience as a new homeowner, rather than worrying about how you're going to pay for it. CNNMoney (New York) First published June 26, 2017: 10:32 AM ET

Does the American Dream no longer include homeownership?

While it has no official definition, the American Dream has always been the notion that citizens of the United States can better their lot in life through hard work. That encompasses the idea that hard-working kids of hard-working parents would have a better life than the previous generation, and homeownership has generally been considered part of that. A decade after the housing market crashed, the homeownership part of the American Dream has become more elusive, according to a new study from Pew Research Center. The report, which analyzed Census Bureau housing data, showed that more United States households "are headed by renters than at any point since at least 1965." Between 2006 and 2016, the U.S. added 7.6 million households, but "in part because of the lingering effects of the housing crisis," according to Pew. Powered by SmartAsset.com SMARTASSET.COM During that 10-year period, the number of households renting their homes jumped from 34.6 million (31.2% of the total) to 43.3 million (36.6%). That tops the relatively recent high watermark of 36.2% renting in 1986 and 1988, while coming in just below 1965's 37% renters rate. Young adults lead the way While young adults have historically been more likely to rent than other age groups, the numbers are increasing. More than 6 in 10 (65%) of households headed by someone under 35 rent, Pew reported. That's up from 57% in 2006 but it's not as big a gain as the 35-44 age group made where the percentage of renters jumped from 31% in 2006 to 41% in 2016. The numbers rose among Americans 45-64 as well, going from 22% in 2006 to 28% in 2016. In fact the only demographic studied that did not post an increase was those 65 or older who stayed flat at 20%. It's not that people don't want to buy In many cases the increase in renters has been blamed at least partially on Millennials not wanting to be tied down or not working hard enough to afford buying. In fact most renters want to buy, according to a separate Pew report: "In a 2016 Pew Research Center survey, 72% of renters said they would like to buy a house at some point. About two-thirds of renters in the same survey (65%) said they currently rent as a result of circumstances, compared with 32% who said they rent as a matter of choice. When asked about the specific reasons why they rent, a majority of renters, especially nonwhites, cited financial reasons." While mortgages are cheap on a historical basis, inventories remain low, prices have soared, and mortgage standards have remained tough. Banks and other lenders may have more flexibility than they did right after the housing crisis, but the days of stated income, low-doc, or even no doc loans are largely gone. Add in the fact that some capable, qualified buyers have decided to put off homeownership due to lingering fears over the economy and you can see why homeownership has declined. Related links: • Motley Fool Issues Rare Triple-Buy Alert • This Stock Could Be Like Buying Amazon in 1997 • 7 of 8 People Are Clueless About This Trillion-Dollar Market Americans still want to buy houses. Some of us can't afford to right now, while others are waiting for better opportunities. Many simply lack the means to reasonably expect ever to be able to make a purchase. Owning a home remains part of the American dream, at least for most Americans, but it's also a less attainable goal than it was for previous generations. CNNMoney (New York) First published July 24, 2017: 10:41 AM ET

Should you rent or buy a home?

Homeownership was once the cornerstone of the American Dream, but times are changing. More U.S. households are renting today than at any point in the last 50 years, according to a Pew Research Center analysis. For many people, the comforts of home include a well-funded bank account -- and in some circumstances, renting can be more financially savvy than buying. Ask yourself these questions as you make long-term housing decisions. You might find that renting is the better option. 1. How long do you plan to stay? Whether renting or buying a home is the best financial choice usually comes down to one thing: timing. Finding an affordable home (and later making a profit on it) depends heavily on how long you plan to keep the property. According to Zillow, for instance, the current home listing price in Bothell, Washington, is $698,448, and the average rental price is $2,500. Assuming a 20% down payment on a home purchase or a 5% annual increase in rental price, you'd need to own the home for at least two years before it becomes the better option. Keep in mind that not every market is booming. In fact, two-thirds of U.S. homes still haven't returned to their pre-recession values, according to a Trulia report, and owners looking to cash out may have to wait until 2025 before securing a profit. Carrying debt is something of a risk, and a 12-month lease gives you the freedom to move and adjust your housing expenses based on your current needs and income level -- two things a fixed mortgage can't deliver. Do your homework and use a comparison calculator to help you understand the costs of buying and renting. 2. Do you know all the costs? Comparing rental prices to mortgage payments is a good start, but it's also important to consider the hidden costs associated with each. For renters, the "cost" is the lack of home equity and the inability to claim housing-related tax breaks. For example, suppose you're a homeowner who lives in New York and falls within the 28% income tax bracket. If your mortgage is $200,000 with a 4.5% interest rate, you qualify for $3,585 a year in tax deductions. That said, you'll also deal with expenses that don't impact a renter's monthly budget, including: Homeowner's insurance: Protecting your home from damage comes at a price, and while insurance rates vary, the rule of thumb is to divide your home's value by 1,000 and multiply the result by $3.50. If you home's value is $200,000, for instance, you'd pay around $700 per year, or $58 per month, for coverage. Renter's insurance, meanwhile, is usually less than $20 per month. Private mortgage insurance (PMI): If you have less than 20% equity in your home, expect to pay PMI, which is usually between 0.50% and 1.2% of your loan value. For example, 1% assessed on your $200,000 mortgage would add $200 to your monthly housing expenses until you built up at least 20% equity in your home. Property taxes: A typical household spends $2,127 each year on property taxes, but you could pay much more depending on location and community benefits. Maintenance: Homeowners shell out nearly $170 per month on average for regular maintenance and repairs, and that's not including big-ticket items like a roof repair, a new HVAC system, and other needs that can cost four or five figures. In this scenario, owning that $200,000 home costs $7,267 a year in extra expenses -- more than double what you'd save in taxes. As a renter, you won't need to worry about adding these fluctuating expenses to your budget, and your landlord may even pick up the tab for your utilities, saving you even more compared to the average homeowner. Consider the hidden costs to learn whether those big tax breaks are worth it. 3. Are you "throwing money away?" It's often said that renting is "throwing money away," but building home equity isn't the only way to watch your money grow. There's no denying that property can be a valuable asset, but on a month-to-month basis, owning a home is still more expensive in all 50 states, according to a 2017 NerdWallet analysis, and an inflated budget can seriously impact your ability to save for retirement. According to the Economic Policy Institute (EPI), the average American has less than $5,000 in savings, and couples between age 50 and 55 only have about $125,000 earmarked for their golden years. That's not nearly enough to fund a long and financially secure retirement, and lower monthly costs can help you divert funds into catch-up 401(k) and IRA contributions, liquid savings, and other investments. For instance, if you're 50 and can save $500 a month in housing-related costs, investing it at a 7% return will yield almost $169,000 by the time you reach age 66. Over the course of several years, you'll likely come out ahead by owning rather than renting. However, if you have reason to doubt your ability to keep up with the costs of homeownership, or if purchasing a home would leave you unable to save for the future, then renting could be the more responsible choice for now.

Winter-blooming plants help nourish bees

By Dean Fodick The Associated Press Oct 18, 2017 0 Winter and early spring are lean times for honeybees as they emerge from their hives, where food supplies are dwindling, to forage. Adding clusters of winter-blooming plants around the yard will give them much needed nourishment. Bees take in carbohydrates from floral nectar and protein from floral pollen. Being aware of bloom times and providing flowers that overlap the seasons are important for beekeepers who want to successfully overwinter their colonies. Some bees, including many wild varieties, begin searching for food as early as January, when sunny days can push temperatures up to 55 degrees Fahrenheit or more. “In the early spring, bees are going to need food to get their engines started again,” said Andony Melathopoulos, a bee specialist with Oregon State University Extension Service. “You can’t simply start up your gardening routines (for pollinators) again in the spring. Solitary wild bees, honeybees and hummingbirds are just clinging to life. “The preparation you do now is very important since early spring is a vulnerable time for pollinators.” Pollinator plants like crocus, primrose and snowdrops will bloom even when snow is on the ground. Trees and shrubs also are effective choices for feeding early emerging honeybees. “People often overlook trees,” Melathopoulos said. “But when it comes to late winter and early spring, it’s the trees that are important. Willows, maples, filberts and hazelnuts are some of the earliest sources of pollen you’ll find. They’re easy to establish and grow.” He also suggests establishing the early blooming plants in clusters to make it easier for foraging honeybees to spot and access them. “Bees are efficient pollinators,” Melathopoulos said. “They really appreciate patches of flowers. They can go from flower to flower easily. It’s hard for them to work on cool days, and if they don’t have to fly between clusters, they really appreciate it.” Many winter-flowering plants grow in the wild, but pollinators generally don’t live near them, he said. That makes cultivating winter bloomers important when you’re planning your gardens. Property owners also should leave suitable places for native bees to hibernate undisturbed. Let turf grass grow long over the winter. Avoid pesticides. Reduce lawn size and turn instead to protective shrubs. Even a small amount of habitat will be enough to sustain bees, Melathopoulos said. “These are tiny creatures. Well-thought-out landscapes can provide all the food they need in winter. Gardeners can really help with that.” Here are some additional bee-friendly plants that can provide a degree of brightness in winter while also nourishing pollinators: • Oregon grape, an evergreen shrub that produces yellow flowers blooming for weeks. • Heath and heather. “In shades of purple to copper to gold, these low-growing plants make a mat of color throughout the year, including winter,” Melathopoulos said. • Male willow plants, maples, apple, crabapple, native cherry. “I’d start with these shrubs,” said Mace Vaughan, pollinator program director for The Xerces Society for Invertebrate Conservation in Portland, Oregon. “Native plants selected to feed bees are definitely part of the solution” to declining bee populations, Vaughan said.

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Stocking a sleepover kitchen

The Associated Press Oct 25, 2017 0 Parents who have hosted sleepovers know that half the fun for kids is making and eating treats. So it pays to prep the kitchen with fun culinary gear and supplies for the indoor campout crowd. Some entertaining ideas and gear: Get the movie-theater vibe going with Great Northern Popcorn’s Retro Style Popper. Or if space is tight, opt for West Bend’s Air Crazy Mini Popcorn Machine, which air-pops 8 cups in three minutes. (www.target.com ) “I like to give everyone a different color bowl, so they know which popcorn is theirs,” says Joss & Main’s style director Donna Garlough. Or offer kids little bowls in different patterns for treats like popcorn and ice cream. Garlough advises choosing smaller ones so kids don’t go overboard with sweet scoops and toppings. (www.jossandmain.com ) Banana splits, sandwiches and sundaes are easy with one of Chef’n’s Sweet Spot Ice Cream Makers. Freeze the dish a day ahead, and then on sleepover night let the kids pour in the ice cream base. Wait a couple of minutes, and start scooping. You can make custom sandwiches with cookies. (www.williams-sonoma.com ) All you need is a cookie sheet for one sleepover classic: “Most kids love pizza, and this idea allows kids to customize their own,” says Parents magazine senior editor Karen Cicero. Just unroll store-bought pizza dough onto the cookie sheet and, using a knife, create an outline for twelve pieces, but don’t cut through. “Offer tomato sauce, pesto, cheeses, veggies and other toppings so guests can create their own designs on one or two of the slices,” Cicero says. Bake according to the dough package instructions. Or let the kids line muffin tins with crescent-roll dough triangles, fill them with pizza-type toppings, and bake for about 20 minutes. (www.bettycrocker.com) Cicero advises stocking up on squeeze bottles that can be filled with fun sauces like ranch dressing or honey mustard sauce. “Kids can use them to make designs on the rims of their plates.” Tools with helpful features like kid-size handles and silicone buttons will help keep preparations moving safely. A set of colorful, easy-grip mugs lets everyone have their own beverage. (www.curiouschef.com ) From the French knife company Opinel, there’s a child-friendly, 4-inch chef’s knife and peeler equipped with finger guards. (www.opinel-usa.com ) Making indoor s’mores can be a fun activity for the sleepover squad. Jamie Lothridge at www.mybakingaddiction.com melts marshmallows and butter over low heat, stirs in some graham cracker cereal, presses it all into a pan, and then adds some chocolate pieces and chills it for a couple of hours. Don’t forget about breakfast the morning after. Load up a Pancake Pen silicone squeeze bottle with batter, and kids can spend the morning doodling breakfast art on a griddle or fry pan. (www.worldmarket.com )

How to Buy a Home Even if You Have Bad Credit

Experts Answer Your Top Questions About Buying a Home With Bad Credit Your credit score is one of the crucial determining factors in whether you can qualify for a mortgage. “The higher your score, the less risky you appear on paper,” says Staci Titsworth, a regional manager at PNC Mortgage in Pittsburgh, PA. If that sends shivers up your spine, keep reading. We’re here to help. The reality is that the average U.S. household has over $15,000 in credit card debt. You’re not alone if you’re wondering: Can I even try buying a home with bad credit? The answer is yes, but for a smooth home-buying journey, you’ll want to take care of any financial blips on your report now. Here we share expert answers to your questions, including exactly what a credit report is and how to raise your score to get ready to buy a house. What exactly is a credit score? It’s common practice for mortgage lenders to check your credit score, which is calculated based on the information that appears on your credit report. Five aspects impact your score, each varying in importance: payment history (35%), debt-to-credit utilization (30%), length of credit history (15%), credit mix (10%), and new credit (10%). A quick primer: Payment history. You need to make payments on time, since one late payment can significantly ding your score. One example: A 30-day delinquency can cause as much as a 90- to 110-point drop on a score of 780 for a consumer who has never missed a payment before, according to Equifax. Debt-to-credit utilization ratio. This is how much debt you’ve accumulated on your credit cards divided by the credit limit on the sum of your accounts. Credit experts recommend keeping this ratio around 30%. If you’re maxing out your credit cards each month, you could be damaging your credit score in the process. Length of credit history. Having a longer credit history raises your score. Since credit agencies look at the age of your oldest account, the age of your newest account, and the average age of all your accounts, you should keep all of your accounts open—even those with zero balances, says credit expert Bill Hardekopf. Credit mix. It helps your score to have a combination of different types of credit accounts, including credit cards, retail accounts, installment loans, car loans, and mortgage loans. (You’re on your way to getting the last one.) New credit. Each time you apply for a new credit account, you trigger a “hard inquiry” on your credit, which dings your score (typically by five points). Therefore, avoid opening multiple credit accounts at the same time, says Hardekopf. Doing so will lower the average age of your credit accounts and hurt the length of your credit history. Caveat: Your credit report doesn’t contain your actual credit score. However, your credit card company can most likely provide your score to you for free, or you can contact a nonprofit credit counselor to find out your score. What is an ideal credit score? A perfect credit score is 850, but only about 0.5% of consumers reach that number, according to Fair Isaac Corporation, creator of the widely used FICO credit scores. Once you’re over 740, you’re considered to be in the best range for mortgages and should be able to qualify for the best interest rates, says Chris Hauber, a mortgage loan originator with Hallmark Home Mortgage in Denver, CO. If your score is in the 700s, you should still be able to qualify for an attractive interest rate. For conventional loans, most lenders look for a credit score of at least 620, says Hauber. At a minimum, applicants should have at least a 660 credit score to land a decent interest rate and avoid jumping through additional hoops to qualify for a loan. Can I get a mortgage if I don’t have a credit history? Ideally, you opened a credit card account by age 20—or at least started to build credit by becoming an authorized user on your parents’ card when you were a teenager. (Remember, the length of your credit history plays a major role in how your score is calculated.) But if you don’t have any credit established, there are other ways to qualify for a mortgage and establish a credit history. “Many lenders will look at monthly payment obligations that don’t necessarily show up on a person’s credit report,” says Titsworth. If you have a good track record of making your car loan payments and paying rent on time, that will help, say experts. Those habits are usually indicative of a responsible credit user. Is bad credit worse than no credit? No one’s perfect and mistakes happen. Maybe you forgot to pay the minimum balance on your credit card bill once or twice—or you recently met with a mortgage lender to discuss your financing options and discovered errors on your credit report. Whatever the case may be, you can always take steps to heal your credit. “Poor credit can be managed,” Titsworth points out. Moreover, there are loan programs designed to help people with mediocre credit buy a home. Federal Housing Administration (FHA) loans have some of the lowest credit-score requirements at 580 with a 3.5% down payment. Loans backed by the Department of Veterans Affairs let military veterans put as little as 0% down on a property without having to pay private mortgage insurance. How can I boost my credit score before I buy a home? To get your three-digit number up to snuff, start by addressing the financial habits that damaged your score in the first place. Pay all of your bills on time each month. Sounds tough, but it is the easiest way to boost your score, says Hardekopf. If you need help adjusting your spending habits and designing a budget that makes sense for you, consider meeting with a financial planner (you can find one at NAPFA.org). Pay down your credit card debt. Since credit scores are often the result of having a high debt-to-credit utilization ratio, one of the best ways to improve your score is to get rid of existing debt, says Hauber. Many experts use the 30% rule of thumb: Charges to your credit cards shouldn’t exceed one-third of your total available credit limit. You may also be able to raise your score by requesting a credit line increase from your credit card issuer; this would effectively reduce your debt-to-credit utilization ratio. It typically involves just making a phone call or submitting a request online. What if I notice errors on my credit report? Carefully review your credit reports for errors. You’re entitled to a free copy of your credit report every 12 months from each of the three major credit-reporting agencies (Equifax, TransUnion, and Experian). One in four Americans said they spotted errors on their reports, according to a 2013 Federal Trade Commission survey. The mistake may be something as simple as someone else sharing the same name as you and your bank mixing up your accounts, says Sylvia Gutierrez, a loan officer in South Florida and author of Mortgage Matters: Demystifying the Loan Approval Maze. If you spot an error, alert your creditor immediately. Once your creditor confirms the error, the company will submit a letter to Equifax, TransUnion, and Experian individually to get the error removed. If the error is just on one bureau’s report (like a misspelled last name), contact that agency specifically to rectify the problem. Hopefully, you spotted it early in the home-buying process, since “it can take time to get errors removed from your report,” says Titsworth. If you’re already in the process of purchasing a home, ask your loan officer to help you speed up the error removal. Can I get black marks removed from my report? If you’re the one responsible for blemishes on your report, such as a missed payment, contact your creditor and ask for a deletion. While this likely won’t work for a serial late payer, it might be granted if you’re a one-time offender; it also helps if you’ve been a loyal customer. If the creditor agrees to the deletion, they’ll send letters to the credit bureaus (the same way they do for errors) requesting that the negative information is removed from your report. Then the onus is on you to gather documents proving that changes that have been made—such as a new credit card statement or letter of deletion—and then have your lender request an updated score from the credit bureaus. This process is often referred to as a “rapid rescore” and can lead to an updated credit score in days instead of months, which can make all the difference when you’re trying to get preapproved for a home loan in a competitive market. Should I get help from a credit-counseling agency? First, you need to understand the difference between a credit-counseling agency and a debt-management company. If you’ve fallen behind on credit card payments, a credit counselor can help you create a plan to pay back your creditors and better manage your money for a relatively low cost. A debt-management company, meanwhile, will negotiate with your creditors to try to reduce the amount of debt you owe—but many debt-management companies charge a large fee for their services. Unless you’re seriously in the hole, a debt-management company probably isn’t the way to go. Whether you should meet with a credit counselor, meanwhile, depends on how complicated your financial situation is and what kind of guidance you want. If you have debt on only one credit card and simply have to pay off the balance, you already know what you have to do to mend your credit score. If the situation is more complicated (e.g., you owe money on several credit accounts and don’t know which to pay off first), a session with a credit counselor may help you devise a payoff plan. Some nonprofits, like the Consumer Credit Counseling Service, offer free consultations.

6 Financial Perks of Being a First-Time Homebuyer

From mortgage points to PMI, unlock the essential info about how homeownership affects your tax burden. Hours after we closed on our first house, my husband and I sat in our empty new living room and stared at the walls. He was the first to speak, saying simply, “I thought it was painted.” We learned a lot about that old house over the next 15 years. While we knew to expect some of the work, other tasks, such as needing to paint the walls, we figured out as we went along. One of the changes we didn’t anticipate was needing to make some adjustments to our tax forms. The forms you fill out when you buy your house are just the beginning. We quickly understood that first-time homeowners have years of mortgage and insurance paperwork to look forward to. Then, of course, there are the taxes. To help you sort through that pile of paperwork and ensure you’re saving as much money as possible we did some research into tax benefits that can come from buying. Six Tax Benefits for New Homeowners 1. You can deduct the interest you pay on your mortgage. The home mortgage interest deduction is probably the best-known tax benefit for homeowners. This deduction allows you to deduct all the interest you pay toward your home mortgage with a few exceptions, including these big ones: Your mortgage can’t be more than $1 million. Your mortgage must be secured by your home (unsecured loans don’t count). Your mortgage must be on a qualified home, meaning your main or second home (vacation homes count too). Don’t assume that if you are married and file a joint tax return, you have to own your home together to claim the interest. For purposes of the deduction, the home can be owned by you, your spouse, or jointly. The deduction counts the same either way. And don’t worry about keeping track of how much you’re paying in interest versus principal each month. At the end of the year, your lender should issue you a form 1098, which reports the amount of interest you’ve paid during the year. Warning: Since, as a first-time homeowner, you pay more interest than principal in the first few years. That number can be fairly sobering. 2. You may be able to deduct points. Points are essentially prepaid interest that you offer upfront at closing to improve the rate on your mortgage. The more points you pay, the better deal you get. You can deduct points in the year you pay them if you meet certain criteria. Included in the list (and it’s a long one): Points must be paid on a loan secured by your main home, and that loan must be to purchase or build your main home. Pro tip: Points that you pay must also be within the range of what’s expected where you live — unusual transactions may cause you to lose the deduction. 3. Depending on the year and your income level, you may be able to deduct PMI. Private mortgage insurance, or PMI, protects the bank in the event you default. PMI may be required as a condition of a mortgage for first-time homebuyers, especially if they can’t afford a large down payment. For most years, PMI is not generally deductible, but the specific rules around it change annually. In 2016, if you made less than $109, 000 a year as a household, you could claim a tax deduction for the cost of PMI for both their primary home and any vacation homes. Check to see if the PMI deduction is a possibility as you are working on your taxes. 4. Real estate taxes are deductible. Real estate taxes are imposed by state or local governments on the value of your property. Most banks or other mortgage lenders will factor the cost of your real estate taxes into your mortgage and put those amounts into an escrow account. You can’t deduct the amounts paid into the escrow, but you can deduct the amounts paid out of it to cover the taxes (you’ll see this amount on a form 1098 issued by your lender at the end of the year). If you don’t escrow for real estate taxes, you’ll deduct what you pay out of pocket directly to the tax authority. And don’t forget about those taxes you paid at settlement. If you reimburse the seller for taxes already paid for the year, you get to deduct those too. Those amounts won’t show up on a form 1098; you’ll need to check your settlement sheet for the totals. 5. Your other tax deductions may matter more. To take advantage of these tax benefits, you have to itemize your deductions on your tax return. For most taxpayers, this is a huge shift: in many cases, you’re moving from a form 1040-EZ to a form 1040 to list expenses on Schedule A. In addition to interest, points, and taxes, Schedule A is where you would report deductions for charitable donations, medical expenses, and unreimbursed job expenses. For itemizing deductions to make good financial sense, you generally want to have more total deductions than the standard deduction (for 2015, it’s $6,300 for individuals and $12,600 for married couples). Most taxpayers don’t reach those numbers — unless they’re homeowners. The home mortgage interest deduction, in particular, tends to tip most homeowners over the standard deduction amount, making those other deductions (such as medical expenses) that might otherwise go unclaimed more valuable. 6. You’ll get capital gains tax relief down the road. I know you just bought your home, but admit it: Resale value is something you considered when you chose your home. And different from other investments for which you’re taxed on the full value of any gain, you can exclude some of the gain attributable to your home when you sell. Under current law, you can avoid paying tax on up to $250,000 of gain ($500,000 for married filing jointly) so long as you have owned and lived in the property for two of the last five years (those years of owning and inhabiting don’t have to be consecutive). Gain over that amount is taxed at capital gains rates, which are generally more favorable than ordinary income tax rates.

3 Reasons You Should NOT Follow the American Dream and Buy Your Own Home

3 Reasons You Should NOT Buy Your Own Home 1. Buying a home ties up money that could be out making money. That brings me to the first reason why you should never own your own home. Once you buy this half-a-million-dollar property, hypothetically, you are going to have to put down $100,000. Now, the $100,000 is going to be the deposit to purchase the property. You are going to tie up $100,000 of liquid capital that is not going to produce a return on investment. Now, yes, you can talk as much as you want about capital appreciation and all that jibber jabber. But if you know how to make money in real estate, you should always stay liquid. You should use the $100,000 to buy, fix, and flip. Make a $20,000 profit, and now that money that you’ve got sitting there is not $100,000 anymore; it’s $120,000. Rinse and repeat. Keep buying, fixing, and flipping—or wholesale or wholetail the property. You don’t have to flip; there are a lot of ways to make money in real estate. Money makes money, so use the liquid capital to go out into the market to make more money with it. Related: Forget the American Dream—Renting, Not Homeownership, is the Path to Financial Freedom Personally, when less than 10 percent of my net wealth purchases my dream property, that is when I’ll pull the trigger on that home—with cash. I can tell you right now, my dream property is around $4-5 million, so I will have to have a net wealth of $50 million before I buy that house. I don’t want any debt; I actually want to buy it with cash. Until then,I am happy to rent. I rent a crappy little 2-bedroom, 1-bathroom apartment with my family right now. Every spare dollar I have is out making more money for me. 2. Buying a home reduces flexibility. The second reason is when you purchase your own home, you will be stuck. You’re going to anchor yourself to the ground, and you’re going to have this big mortgage that forces you to get out of bed every day and go to work so you can pay it off. You will also probably be buying this property in a great little school district so your kids can go to school, get good grades, and go to college. Guys, you are just falling for the stereotypical American Dream. You’ve got no mobility. What if there is a change in government, what if there is a third world war, what if you need to move quickly? I have literally moved like a gypsy, looking for other opportunities. I’m living in Toledo, Ohio right now, out of all places. There is not a ton to do here except invest in real estate and make a ton of money doing it, which I’m doing right now. I’ve got multiple companies here. This was a sacrifice I was willing to make. I mean, what if you get a better job opportunity? In my opinion, the world is changing at a rapid pace. You do not want to throw that anchor. There is so much uncertainty going on in today’s day and age, You want to be flexible, mobile, and move to where the opportunities are available. 3. Buying a home introduces all kinds of expenses. That leads me to reason number three, and that is the expenses. I think that a lot of you out there don’t understand how many expenses you will incur by owning your own home. Let’s just start with this thing called a mortgage. I’ve already mentioned before that after you get into a ton of debt with a mortgage, you will have to get out of bed every day to go to your 9-5 so you can afford those mortgage repayments. I don’t have to do that, as I already mentioned. All my liquid capital is out in investment properties, producing more money and cash flow for me, which is how I afford my rent. Related: Why Following the American Dream Will Rob You of Financial Control How about all the maintenance expenses—cleaning the gutters, mowing the lawn, the insurance costs? Time is money. I feel sorry for those people mowing their lawns an hour every single week. I would rather be making this video or on the phone. I would suggest you rather use your liquid capital and invest it in cash flowing investment properties or in buy, fix, and flip properties. Rent a crappy little home or a condo, whatever it may be, and use your liquid capital to invest it and make money. Let the tenants cover all of your expenses. Look, I know that this vlog goes against popular belief. I’m happy to take whatever criticism you throw my way. So please make sure that you comment below. I would love to hear from a person who has successfully purchased their own home, hasn’t incurred that many expenses, and also has a large real estate portfolio on the side. I would love to hear how you have structured all of that.

5 Secret Sources of Down Payment Money

The down payment: It’s the biggest test of our ability to save money that most of us will ever face, and one that stands between us and our ability to become a homeowner. It can be tricky to stockpile enough money for a down payment, but it’s also an opportunity. The more money you put down, the more choice you’ll have about how much house you can afford and what you want the monthly payment to be. Plus, building up a cash cushion will definitely give you peace of mind once you’re in your new home. Here’s How to Boost Your Down Payment Savings 1. Go local. Gone are the times when nationwide programs allowed for the zero-down loan, the federal homebuyer tax credit, and the use of tax credit funds toward down payment and closing cost requirements. Where have all the down payment assistance programs gone? Local. The best programs of this sort are now largely operated by local governments—primarily cities and counties—and the rules for qualifying vary. Some are exclusively for buyers with low or moderate incomes; others are dedicated to helping first-time homebuyers. Many of these programs have a limited pool of funds that may run out over the course of the fiscal or calendar year, and almost all of them require buyers to jump through some hoops, such as completing homeowner education classes or choosing a home that meets specified criteria. To find these programs, look for links for homebuyer assistance on your city, county, and state websites. Only trust websites that end in .gov—scammers posing as governmental agencies abound. Local real estate agents and mortgage brokers often know the ins and outs of these programs too. 2. Hit up your relatives. Most mortgage programs will allow for some portion of your down payment to come in the form of “gift money,” which is exactly what it sounds like: money someone gives you to help you buy a home. While gift money may sound great, be aware that taking gift money from a relative can create relationship issues or come with emotional strings attached. Plus, lenders frequently require that gift money be accompanied by a letter that clearly states the money is a gift, not a loan. The lender may also want to see a bank account statement from the giver, proving that the money was theirs to give. 3. Ask your employer. Universities and municipal departments that employ first responders such as police and firefighters frequently make down payment and other home-buying assistance programs available to staffers. Large employers or even smaller companies seeking to lure top-level recruits do something similar: relocation assistance programs. Check in with human resources to explore whether any such assistance is available—and if you happen to find yourself a hot prospect on the job market, consider trying to negotiate relocation or down payment assistance into your offer package. 4. Tighten your budget. Get gut-level real with yourself about what’s truly important to you. If the answer is buying a home, then it’s time to examine your spending and look for leakage that you can redirect to your down payment savings. If you spend $20 a workday on a morning coffee and bagel and a takeout lunch, that’s at least $400 per month—almost $5,000 a year you could be saving. And those numbers are not inflated to reflect big-city prices. Nor is the $100-a-month cable bill, the $15 yoga class, or the $2,000 vacation. Instead, brown-bag your lunch, stream TV shows and movies from one online source, and rally your friends to do a workout class together from that streaming site. Cut hotel costs by renting a private room or small apartment on a site such as VRBO or Airbnb. The key is to shift out of spending autopilot and to transfer the saved money into a separate savings account that’s earmarked for your down payment. 5. Borrow from yourself. There are situations in which it may make sense to borrow a few thousand dollars from your 401(k) or IRA. Some retirement accounts allow you to borrow against or pull out funds, penalty-free, to apply them toward your down payment on a home. Is it advisable for everyone, in every situation, to deplete their 401(k) or IRA to plug that cash into a house? Absolutely not. But if getting your down payment to the 20% mark by borrowing from your 401(k) gets your mortgage interest rate down and allows you to repay that cash to your own retirement account (versus to your mortgage lender) with interest, you and your financial adviser might agree that this move is right for you.

4 Ways to Cozy Up Your Kitchen for Fall

Grab your hearty soup recipes, decorative pie plates, and favorite cookbooks. Fall is here, and with just a little effort you can get your kitchen ready to make the most of it. The leaves changing color indicates the season has changed, and so follows your home decor. Decorating for the chillier fall months means incorporating warm and inviting colors and textures into your home’s interior design, specifically in the kitchen. Try these four tips to create a cozier kitchen for fall. Weave in dark textiles Fall means decorating with gorgeously textured throws, pillows, and table linens. Introduce your kitchen to an autumnal palette using dark, natural window coverings and similar table linens for a cozy effect. This look juxtaposes raw texture with soft details like fresh fruit, warm placemats, and smooth surfaces. Bank on butcher block Found most often in farmhouse-style or rustic homes, butcher block is great for countertops and tables because it’s durable and looks better the longer you have it. If you’re thinking about switching out your countertop, consider butcher block for a warm, inviting feel. If you don’t want to commit to a full countertop, try a large cutting board or table to add earthiness to your kitchen. Add pops of color If your kitchen has a blank space or accent wall, consider painting it for an inviting scene. For the fall season, you can choose to use warmer, darker colors like a deep red, warm orange, or olive or brown tone. Don’t want to paint an entire wall? Select a piece of art or two featuring deep and rich colors to create a cozy ambiance. You could even paint your cabinets or counters. Nurture indoor plants Houseplants are always good go-to decorations because they require little upkeep, and add a touch of freshness to any space. They are particularly useful in the fall because they can double as herb gardens or unique decor. Install a small indoor garden on your window sill or on a shelf near a window to have easy access to fresh rosemary, sage, and basil, even when the weather might not call for gardening. While these suggestions may seem small, they are great touch-ups to boost your festive theme this fall season. Add one or two, or mix all of the design tips for a home-sweet-home feel.

Something to Taco 'Bout Fundraiser

Join us for Taco Night! We’ll have the taco truck Madd Mex serving up some delicious bites, and plenty of libations to go around. After dinner, stick around for a silent auction with fabulous prizes from some of our favorite local businesses in San Carlos. Thursday, October 19 4 – 7 pm Coldwell Banker Residential Brokerage 580 El Camino Real San Carlos, CA 94070 Ticket cost: $30 All proceeds benefit Stanford Children’s Hospital and Angel Flight West.

The Top 7 Rental Amenities Quality Tenants Want

When I was a renter, there were a few things I needed from a place. Not all amenities were important to me, but many are. Here’s what most renters are looking for and why I make it a point to provide the optional amenities. The Top 7 Amenities Renters Want 1. Location, Location, Location Does this place have easy access to roadways? Can I bike to or otherwise easily access grocery stores? Will my commute be reasonable for my preferences? Is this area safe? Are the school districts acceptable? These are all questions renters are going to ask when looking for a quality place to live. You don’t necessarily need to provide all of these to have a rental that performs well, but they are certainly things to consider. 2. Parking The properties I own that have covered parking (garages mostly) are in very high demand. Covered parking is big in places like Florida, where it rains often (especially near salt water, which can be damaging to cars), Northern states with plenty of tough winter weather, and areas like Colorado where remnants of the last few hail storms are seen on a few cars throughout the Denver metro area. invest-garages 3. Private Spaces Things like a fenced-in yard go a long way, especially if you happen to be pet-friendly or if these tenants have young children. Many places also provide extra storage on site to assist with the moving process or to otherwise hold excess sports gear if the place doesn’t provide something like covered parking or garages. Relate: 4 Steps to Boost Your Bottom Line by Improving Tenant Retention 4. Unit Readiness No one wants to move into a project. The unit needs to be clean and in working condition. Sometimes things are overlooked during move-out and move-in inspections, though. The intent is to cut down on that so the tenant can be left to unpacking instead of scheduling additional visits. Making sure older HVAC units, electrical, plumbing and the like are properly maintained will fall into this category as well. 5. Unit Upgrades The nicer a property is, the more tenants you can attract. Stainless steel and energy-efficient appliances go a long way to giving a good first impression, and following local trends will help a great deal as well. Get rid of that dark green or maroon carpet. In many cases, there’s some really nice hard wood flooring under them anyway! If you have an old, tired bathroom, dress it up with a nice vanity, newer sink, and updated fixtures. These are minimal repairs that can dress up an entire room. When upgrades are done, figure out how much more you can charge as a result and how long it will take to make that money back. If it means you provide a higher quality product and hopefully receive a better tenant pool, why not go for it? 6. Included Appliances Everyone has their own preference. I heard a BiggerPockets Podcast episode once where the landlord rented each appliance for a certain price and otherwise had a very low base rent. I always choose to include a washer and dryer in the unit (or shared space for multifamilies) for many reasons. If I can find a unit with them already, great If the unit doesn’t have them, that’s one of the first orders of business. Related: The Top 10 Rental Features That Attract Cream of the Crop Tenants 7. A Great Renting Experience As landlords, we are providing a service. Make the effort to respond to maintenance requests promptly. Tenants are looking for peace of mind knowing that if a problem arises, the landlord (or management company) will respond in a timely manner. In fact, I advertise the service as much as the rental when promoting the place. I’ve lived in apartment complexes where I’m simply a number and where I’d be lucky to see a maintenance request filled within the month. I’ve also lived in a mom-and-pop-managed condo where their son answered all the maintenance requests the next day. In a lot of ways, tenants are interviewing you as much as you’re interviewing them. So, Why Do I Provide These Amenities? Easy. The more extra amenities you provide, the larger the amount of quality tenants you will likely attract. I would rather pay a bit more for a property and on the other side, charge a fee for amenities. Hopefully the worst case scenario is that I break even maintaining these appliances with the trade-off of fewer tenant-related headaches. For me, that’s worth it. Garage door needs fixing? Hopefully the extra $10/month in base rent over four years more than pays for that. Fence in the back yard coming loose? Same deal. Ideally in this system, you attract a larger pool of great renters to supplement an already fortified tenant application and approval process. At times, you’ll need to fix or maintain these extra amenities, but in my mind, I’m happy to trade maintenance requests for peace of mind.

FAA considering making Surf Air flight path over Bay official

The Federal Aviation Administration is considering making the route Surf Air has used to avoid homes on the Midpeninsula – by flying over the Bay – an official fair-weather route. But an organized group of residents from Sunnyvale has turned out in force against the route saying it transfers the noise to their neighborhood. On Wednesday, the FAA held what it called an informational meeting in San Jose as part of its consideration of whether to make what it calls the Bayside Visual Approach an official charted flight path. That would mean the route could only be used when pilots can actually see the airport, but could be flown using instruments, which many pilots consider safer to do even in visual conditions. The meeting was held in the Santa Clara County Government Center in San Jose starting at 6 p.m., and many of those attending complained about the location as being far and difficult to reach from the areas affected by Surf Air flights. Nonetheless, about 100 people showed up, the vast majority of them wearing bright orange T-shirts signifying they were part of the Save Our Sunny Skies group. That group, made up of mostly Sunnyvale and Cupertino residents, is protesting the route because it brings more planes into the already congested airspace over their homes. Officials had designed the meeting to include about 40 minutes of presentations from Surf Air, the FAA and the San Carlos Airport – which is owned and operated by San Mateo County – and then move out into the lobby, where people could ask questions of the officials. But dozens from the Save Our Sunny Skies group, including a leader with a megaphone, refused to go along and said they wouldn't leave until the officials were regrouped in the auditorium to answer questions from and to the group. Officials agreed to return to the auditorium, but only after most of the meeting attendees who were not part of the Save Our Sunny Skies group had left. The route was developed by Surf Air in cooperation with the FAA after Midpeninsula residents complained about the noisy Pilatus PC-12 turboprop planes the commuter airline uses. The FAA allowed Surf Air to use the Bayside Visual Approach for a six-month experimental period that ended in January. The route takes planes over the Bay – starting in Santa Clara County near Moffett Field – as they descend toward the San Carlos Airport. The FAA has evaluated the results of the trial, during which conditions allowed Surf Air pilots to use the route about 67 percent of the time, and is now doing an environmental review. Thann McLeod, a manager of airspace and procedures, planning and requirements for the FAA, told the group that her "primary responsibility in the FAA is safety." "If something is not going to work, it's not going to work for a reason, not because I'm favoring one community over another," she said. She may have been anticipating that if the FAA decides not to make the approach official, Midpeninsula residents will be angry; if it does approve it, the Sunnyvale and Cupertino residents will be angry. Because the air space in the Bay Area is so congested, the FAA had little choice in choosing the route, she said. "We run out of room very, very quickly," she said. "This was the best we could do." "We did put a lot of thought into this procedure when we designed it," she said. Surf Air and Encompass, the company that has taken over the operations part of the SurfAir business, say that they have been working to find another air route to the San Carlos Airport and have experimented with a route that comes in from the east over the Bay and avoids more residential areas. "We need a global solution," said Charlie Caviris, the Encompass chief pilot. The route from the east "is a way that we can greatly reduce noise for communities," he said. The FAA says comments will be taken on the Bayside approach until Oct. 27. Comments can be emailed to: 9-awp-sql-cvfp@faa.gov or mailed to: Noise Concerns, AJV-W25, FAA, 1601 Lind Ave. SW, Renton, WA 98057. Comments may also be made on the FAA website, which also includes a number of presentations from the meeting. After the six-month trial ended, Surf Air pilots continued to use the route while the FAA studied the results. Existing regulations allow pilots to fly non-charted routes under visual flight conditions, but they, not air traffic controllers, are responsible for maintaining separation from other aircraft and obstacles. Surf Air started using the San Carlos Airport in June 2013, and by July of this year had 228 flights a week arriving at or departing from San Carlos. Its customers pay a monthly fee for unlimited flights. --- Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.

33rd Annual Moonlight Run and Walk

Presented by the City of Palo Alto Friday, October 6, 2017 at the Palo Alto Baylands Start Times: 5K Walk @ 7:00 p.m. / 10K Run @ 8:15 p.m. / 5K Run @ 8:45 p.m.

4 Things Vets and Service Members Need to Know When Buying a Home

Oct 1, 2017 Updated 6 hrs ago 0 4 Things Vets and Service Members Need to Know When Buying a Home Specialized loan officers can help military customers make the most of earned benefits. (StatePoint) If you’re a veteran, reservist or active duty service member, it’s important to know that there are special benefits you may be eligible for when buying a home. “Veterans and service members have earned the opportunity to become homeowners, and it’s crucial that they are well-informed about the benefits and options available to them,” says Greg Murray, military mortgage program manager at Wells Fargo, who is also a U.S. Navy veteran. To help, Murray has identified the top four things to know when buying a home. • There are special financial education resources designed for military personnel and veterans. Take advantage of these free online resources so you can be a savvier home shopper. For example, Wells Fargo’s Hands on Banking for Military, which offers courses on topics like banking basics and smart spending, also contains a comprehensive guide on home-buying. • Before assuming you won’t qualify for a loan, talk to a lender. Be sure to tell the lender that you have served or are currently serving in the military. They can inform you about the options available to you, such as a Veteran’s Administration (VA) loan. A VA loan is a home loan guaranteed by the federal government, designed to help those who’ve served in the military obtain homeownership. They can sometimes be obtained with zero down payment. Gifts or grants can be used to help cover down payment and closing costs, subject to program requirements, and no mortgage insurance is required. • A large portion of qualified buyers aren’t taking advantage of the low-to-no-down-payment mortgage options available through VA loans. Indeed, more than 21 million veterans and service members live in the U.S., however, over the past five years, a mere 6 percent of them bought a home using a VA home loan, according to the Department of Veterans Affairs. This may be due to the common myth that active duty service members, National Guard members and reservists are not eligible for VA loans (in fact, they may be eligible). Many also are unaware that unmarried, surviving spouses of veterans who died as a result of service or service-related causes are also eligible. • Individual banks, not the Department of Veterans Affairs, offer VA loans, allowing you to work with a lender who understands your needs and makes you feel comfortable. “A specialized team member who understands unique military needs, such as a Wells Fargo Military Lending Specialist, can help you make the most of the home loan benefits you’ve earned,” says Murray. Developing a relationship with this lender is also a good idea, as you may later choose to refinance through the VA Interest Rate Reduction Refinance Loan (IRRRL) program. To learn more, visit wellsfargo.com/military. If homeownership seems daunting, remember that taking advantage of VA benefits can make it more financially and logistically viable.

New housing project aims to meet Redwood City’s needs

As early as next fall, ground at a downtown Redwood City site currently used as a parking lot could be broken to make way for 117 affordable apartments for seniors and a child care facility. Plans for an affordable senior housing development, ground-floor child care facility and publicly accessible creekside trail at 707 Bradford St. took one step further Monday as the City Council approved an agreement with affordable housing developer MidPen Housing. Nevada Merriman, MidPen’s director of housing development, said arriving at a development agreement with the city is one of several milestones ahead of the nonprofit as it moves forward with the planning process for the seven-story housing development next to a stretch of Redwood Creek. With experience providing affordable family and senior housing in several other Peninsula cities, including Redwood City, she said the nonprofit is well-positioned to fulfill the city’s goal to provide much-needed housing for seniors, a group she said comprises the fastest-growing population in San Mateo County. “The need for long-term housing for seniors is huge,” she said. Situated in Redwood City’s downtown, seniors living at the apartment building will have access to a variety of tailored health resources though they may not need them, said Merriman. She is hopeful that the nonprofit’s partnership with the county’s Health System and other health providers will make the housing development a platform for promoting wellness. MidPen is committed to renting the units to seniors who are 62 years old or older, with a few exceptions for special circumstances such as older adults raising a grandchild, said Merriman. The nonprofit, which won the city’s bid for the project in April 2016, will also rent at least 49 percent of the units at affordable rates to households whose income is less than 60 percent of the area median income, according to a staff report. By making space for an 8,000-square-foot child care facility in the building’s ground floor, the nonprofit is fulfilling another one of the goals city officials outlined in the bid, said Merriman. With families dropping off and picking up children for day care and downtown residents and visitors expected to use a publicly accessible path allowing access to the creek, the multi-use nature of the site could foster its own community, she said. “There are a lot of synergies there that will make for a healthy, thriving community,” she said. “The city’s really positioned the site really well to be able to take advantage of what they already have in place there.” Karen Haas-Foletta, executive director of Belmont-based Footsteps Child Care, said her nonprofit was chosen to provide child care at the site, which will provide much-needed space for a resource in high demand across the Peninsula. “There’s a huge need for [child care] facilities, and there’s an especially huge need for infant [care],” she said. She is planning to make space for 70 children from infant to preschool age in what would be her nonprofit’s 10th location and fourth preschool. Now 23 years old, Footsteps Child Care provides day care for children ranging from infants to middle school students in locations in Belmont and Redwood City. Haas-Foletta said the intergenerational nature of the building will allow for unique learning opportunities for students as well as staff and volunteer opportunities for interested and qualified seniors. “Our goal is not just to have a senior come and read a story, but to be really part of the program,” she said. Haas-Foletta has experience working with MidPen in Redwood City, providing child care for some 24 children at the nonprofit’s City Center Plaza complex offering affordable housing for families with ground-floor retail. She said she is looking forward to working with a child care environment specialist to design the space at 707 Bradford St., but said the region still has a long way to go to meet the need for child care. “It’s good news, but it’s not going to solve the problem,” she said. Vice Mayor Ian Bain expressed enthusiasm for MidPen’s efforts to meet several critical needs for the city, and said he hoped the city would have the opportunity to review other creative solutions providing affordable housing in the future. He said when the city designated the parcels between Jefferson Avenue and Main Street for affordable housing and child care years ago, officials had considered how space that opens up in the future could be designated for several other groups, such as veterans, families and nonprofits. “I anticipate we’ll be doing more projects like this,” he said. Merriman commended the city for having the foresight to address several critical needs and for the contribution of the land, which MidPen is expected to purchase from the city for $1, according to a staff report. In addition to leveraging federal low-income housing tax credits, Merriman said MidPen has secured funds for the housing development from the county through Measure A, a half-cent sales tax voters extended through Measure K in November, and that the nonprofit hopes to stay competitive for Measure K funds to fund the project. Merriman said the nonprofit has submitted project plans to the city and hopes they will be reviewed by the Planning Commission before the end of the year. She said MidPen is working toward breaking ground on the housing development in November of 2018 to be able to address the need for affordable housing as quickly as possible. “It’s a hot topic in the Bay Area,” she said. “We’re very proud to be able to help make a difference.” anna@smdailyjournal.com (650) 344-5200 ext. 102

Where should I stash my down payment savings?

Saving for a down payment can be a big undertaking and a major hurdle to buying a home. That's why you want to be sure to protect your hard-earned savings. Powered by SmartAsset.com SmartAsset.com With a plan of homeownership less than a year away, experts recommend keeping the funds in a savings account. The idea is to keep the money easily-accessible and safe. "While other investments may be able to provide a higher return in the long run, because of their short-term time horizon, it's most important that they ensure they have the money they need to buy the house when they want it," said Roger Ma, a certified financial planner and licensed real estate agent in New York City. While savers have been dogged by low interest rates on savings accounts, online savings accounts usually offer higher yield. For instance, Ally Bank is currently offering a 1.05% annual percentage yield (APY) on its online savings accounts, compared to an average .06% savings rate at big banks. Related: Here's how long it takes to save for a down payment Experts also suggested considering putting the money in a money market account or a certificate of deposit (more commonly known as a CD). CDs tend to pay higher interest than savings accounts, but your money is locked in for a certain time period. "A CD might be restrictive," said Eric Roberge, a CFP and founder of the firm Beyond Your Hammock. "Make sure the term is aligned with when you will need the money. Your first priority should be liquidity and the ability to access the money without fees." broke no more Send us your money questions for a chance to be featured in Broke no more! Ask us here. With any of these accounts, it's important to verify the bank is FDIC insured. If your plan is to buy a home in roughly three to five years, you have a little more wiggle room -- but not much. Longer-term CDs can have higher higher yields, and depending on your risk tolerance it could make sense to invest some of the funds. "If you wanted a little risk, you can consider investing 30-40% of the funds in equities and the remaining balance would be 60-70% in bonds," said Patrick Stark, director of financial planning for RS Crum. "But be careful with the bonds, make sure they are high-quality investment bonds." Once the time horizon becomes five years or longer until homeownership, wanna-be buyers have even more savings options. If buyers had a lump sum of money saved up already, Roberge might advise them to put it in the stock market in a conservative portfolio of either a 50-50 split between stocks and bonds or one that favors bonds. At the same time, buyers would continue to save more money in a savings account. "The idea is that in five years they will probably have enough in the savings account to just use that money for the down payment, and then the money in the stock market they can leave it in there," he said. While lenders like to see a 20% down payment, it's not always a requirement. There are other low-down-payment options, including a government-backed FHA loan that requires as little as 3.5% down. However, putting less than 20% down means you'll pay more every month since you'll be borrowing more money and likely be charged private mortgage insurance fees on top of your mortgage payments. Lastly, experts said signing a down payment check shouldn't clear out your bank account. Stark recommended keeping three to six months of living expenses in an emergency fund to cover any unexpected expenses. "No matter how well you plan things, there are always unexpected expenses when you own a home," he said. Send us your money questions for a chance to be featured in Broke no more! Ask us here. CNNMoney (New York) First published June 15, 2017: 9:59 AM ET

1031 Exchanges Under Threat?

Daily Real Estate News | Thursday, June 15, 2017 A major tax advantage for the commercial real estate industry may be one of the casualties in a sweeping federal tax reform expected this year, The Wall Street Journal reports. Read more: Lawmakers Need REALTORS® on Tax Reform We Could Lose 1031s. Here’s Why That Matters Some lawmakers are eyeing the 1031 exchange provision to get the tax-rate cut they seek. The provision allows sellers of real estate and other assets to defer capital gains taxes by reinvesting any profit in “like-kind” properties. The 1031 exchange applies to a range of assets, but real estate accounts for the largest portion of exchanges at 36 percent, according to Ernst & Young LLP data. The Joint Committee on Taxation estimated in 2014 that repealing like-kind exchanges could raise $40.6 billion in extra tax revenue over one decade. Several lawmakers consider the provision to be loophole that has limited economic benefit and, therefore, some are looking to put it on the chopping block in order to pay for lower tax rates. For example, Mark Mazur, the director of the Tax Policy Center, says 1031 exchanges “really have become just a way to defer tax liability.” However, real estate executives believe that any move to get rid of 1031 exchanges would be devastating to the economy and the industry. A recent report by Green Street Advisors says that like-kind exchanges are used in 10 percent to 20 percent of commercial real estate transactions. Any threat to 1031 exchanges “would cause a lot of transactions not to occur,” says Jeffrey DeBoer, chief executive of the Real Estate Roundtable. He adds that investors who purchase real estate through 1031 exchanges are more likely to invest in those properties than those who pay cash. “Therefore, you have capital you can now put into the newly acquired property.” The House Ways and Means Committee has yet to release a bill on the matter, although The Wall Street Journal reports that the chatter among lawmakers on such legislation is growing. Maintaining 1031 exchanges is a top priority for the National Association of REALTORS®. Earlier this year, NAR President William E. Brown said the association will meet any proposals to curb 1031 exchanges with strong resistance because the provision is a vital vehicle in driving commercial real estate development. “If that goes away, commercial real estate will be decimated,” Brown said earlier this year. “That’s something we’re being very clear about with Congress. This provision is to commercial real estate what [the mortgage interest deduction] is for residential real estate. We will fall on our sword for this.” Source: “1031 Exchanges, a Cherished Real Estate Tax Break, Faces Extinction,” The Wall Street Journal (June 14, 2017) [Log-in required.]