Office (305) 433-2818
eFax (786) 228-0879
Brasil: +55 (21) 4042 1368
Argentina: 54 (11) 5258 2199
Romania: +40 (21) 539 8233
Contact Us

Updated: Tuesday, October 24, 2017

Selling: Half The Winning Real Estate Strategy

Lets zero in on the family home to reveal room for improvement in ways this investment can be put to work when owners are intent on living full, active lives.

Traditionally, when the children were grown and gone, "empty-nester" homeowners/sellers were faced with two options regarding the family home:

Option 1. Sellers who did not intend to re-enter the real estate market put their profit to work in other investments or projects that meant a lot to them, or they lived off the proceeds. Historically, homeowners who sold the large family home slipped into a quieter, cheaper life>

Option 2. Sellers who used the proceeds of their sale mdash; "cashed in their nest egg" mdash; to purchase a smaller home remained in control of their lives and finances. The ideal downsizing scenario involved selling the large family home and buying a bungalow or condominium unit using less than half the proceeds of the home sale. The left-over capital was used to finance years of quiet, comfortable living on the edge of the mainstream or not mdash; sellers choice.

Currently, many seasoned homeowners are not interested in selling their family home only to settle for a lower standard of living, less control of their homes and lives, or disappearing from the mainstream. When traditional options are unattractive or unavailable, sellers often stay in homes and communities that no longer suit them and wait to see what will happen next:

  • When faced with the prospect of selling without netting the funds for their ideal next stage, many homeowners hunker down to wait out the real estate market. In many markets, this reaction accounts for lower numbers of available listings.
  • In hot sellers markets, sellers may be discouraged from cashing in their now-higher-priced homes because they would still not be able to afford their preference mdash; a smaller property in the same or a better area which is significantly less expensive, so theres a nest-egg leftover. The problem for many seasoned sellers is that competition with first-time buyers and builders drives up prices for smaller homes and this, in turn, stalls seller moves.

The full return from real estate ownership mdash; on top of the benefits gained by living in the property or renting it out mdash; comes from buying smart in the first place, selling smart, and putting the earned profit to work either to purchase more real estate or other investments. Long-time owners are usually able to sell for more than the original purchase price. However, sellers who invest time and effort only in selling, may miss out on earning even greater profits and returns by wisely using the proceeds of the sale.

In many markets, rising residential prices have meant bonuses for sellers and frustration for buyers. Since many sellers become buyers, sellers become winners and losers as described above.

Its way past time to step outside the box of traditional options. Even in tough markets, a range of housing alternatives should be explored. Imaginative approaches allow sellers to win on the sale of the family home and on the purchase of their next home.

In many real estate markets, sales are not equally brisk throughout the entire area nor through the entire price spectrum. For instance, homes in neighborhoods with popular schools may sell more quickly and at higher prices. Homes listed under 500,000 and over one million may be selling well while the middle market is stalled. Sellers in hot areas will do well when they sell. Those who buy in a stalled market may also gain on their purchase. However, sellers who buy a smaller home in a hot market may pay more than they wish for a lesser property since they are competing with first-time buyers and builders.

Different Seller Strategies Will Earn Different Rewards

Strategy 1. If they cant find a desirable lower-priced bungalow, sellers could spend more and buy a duplex, triplex, multiple-unit apartment building, or mixed-use commercial/residential building which would provide living space equivalent to a bungalow in the desired neighborhood plus income from the other units, tax deductions, and other financial benefits. An experienced real estate and financing professional will explain how to finance this transaction using the existing real estate and the income history of the revenue property, while keeping the potential for increased appreciation in mind.

Strategy 2: Sellers could explore the full range of community choices open to them beyond what they know about. With the help of an experienced real estate professional, they could search out a variety of locations where the type of housing they want to buy as their next step is available at the price theyd like to pay. The adventure involves expanding beyond what sellers have experienced so far. This is a big country. And then theres the world..

Strategy 3: Sellers could shift from passively waiting to see whats next to creating more value in their real estate that could also increase their flexibility with the next step. For instance, adding a self-contained rental suite or apartment mdash; if it is done correctly and to zoning bylaws mdash; can achieve four key results at once:

  • Increase property value
  • Attract more buyers
  • Provide extra income and tax advantages until its time to sell
  • Provide choice mdash; the seller could move into the smaller secondary unit and rent out the rest of the house for even more income and flexibility until a move makes sense.
  • Local municipalities and experienced real estate professionals know how adding a rental unit must be done. Armed with the correct information, sellers can engage the right contractor, with >

    Consciously shift from traditional, last-century thinking about your real estate. Design the 21st-Century Selling Strategy that works for you and your property.

    Resource: Savvy Seller Series:

    • Why Buyers Wont Buy Your Home"
    • Five Key Questions For Home Sellers"
    • Are You Prepared For Disaster?"

    To understand more about how buyers view the sales process, read our Savvy Buyer Series:

    • Buying: From Whose Perspective?"
    • Savvy Buyers Search Out Visual Disasters"
    • Home Buyer Regrets Are A Reality"

    For more about PJ Wades views on effective communication, visit Whats Your Point? Blog

    Full Story >

    California REALTORS Face Assessment To Fund Ballot Initiative

    Recently the directors of the California Association of REALTORSreg; CAR voted to place a 100 assessment on each of the associations approximately 180,000 members. This vote took place at the directors annual fall meetings, held this year in San Diego, October 11 -- 14. The purpose of the assessment is to help fund a CAR-sponsored ballot initiative to be placed on the November, 2018 California ballot.

    The initiative, if passed, would allow "individuals 55 years of age and older to transfer their property tax basis to any home in the state, to purchase any price home, and to transfer their basis as many times as they wish."

    To appreciate the significance of this, it is necessary to have some idea of Californias property tax system. Property tax valuations are based on purchase price. You buy a house for 700,000, the assessor will value it at 700,000. After that, increases in property tax value are seve>If you have lived in the same home for 15 -- 20 years or more, you are probably enjoying >Californians sought to solve this problem in 1986 with the passage of Proposition 60. It allowed seniors to keep their property tax base assessment when they moved within the same county. However, in 1988, Proposition 90 was passed which allowed each individual county the option of participating in this tax base transfer by seniors who move from one county to another. This had great significance, because many retirees move to a different county e.g. in the mountains, or desert than the ones in which they had lived.

    Only eleven of Californias 58 counties will allow a senior from another county to transfer his or her old property tax base to a newly-acquired home in that county.

    Californias housing market is currently hampered by a lack of inventory. One of the causes is said to be the "log jam" created by the situation outlined above. It is claimed that large numbers of seniors are >Could a 100-per-member assessment result in such a beneficial effect? Hardly. That money just gets things started. According to background material supplied to the CAR directors, the assessment would only provide part of the funds needed. "The cost to circulate the initiative for signature gathering is 3 million, with the cost of the subsequent campaign ranging between 30 million and perhaps upward of 50 million, if the initiative is heavily contested. Funding would come from C.A.R. political action committees, reserves, NAR funds and a C.A.R. member assessment [i.e. the one now being discussed]."

    Strong opposition to the ballot is expected. It would not be surprising if a supplementary assessment became necessary. And, of course, no matter how much funding is achieved, the voters could always reject it.

    Bob Hunt is a director of the California Association of Realtorsreg;. He is the author of Real Estate the Ethical Way. His email address is .
    Full Story >

    DIY Fall Decor Tricks

    Who says you have to spend big bucks to give your home some fall flair? All you need is a little creativity. If you also have a few basic art or crafting items at home, you may not need to spend any money at all

    This fun craft is something the whole family can do. Even little kids can help pick out leaves and other items and place them on the pumpkins. This is a no-carve craft; all you need to stick your stuff down is Mod Podge.

    These more fanciful versions were made with leftover party napkins and glitter. Note that you can decoupage a real or craft pumpkin.

    You dont need super DIY skills to create a warm welcome this season. For this great-looking wreath, you dont even need a wreath form Just go grab a wire hanger from your closet.

    If you dont live in an area where you can readily find pinecones or or dont want to go foraging through nature, try using felt instead. The bonus: you can choose any color you want

    Or, pick up a simple dropcloth to make this neutral, chic wreath that will certainly get noticed.

    The great thing about faux, carvable pumpkins is that you can use them to create gorgeous centerpieces without worrying about the pumpkin going bad. We love this mix of florals, leaves, and filler. The best news is that you can cover and store it, and then take it out again next year

    Theres a reason pinecones show up so often in fall deacute;cor. Not only do they exude the bounty of the season, but theyre also: free, or at least inexpensive if you dont live in an area where they fall from trees; and, they can be used in so many ways to create inviting deacute;cor. This centerpiece couldnt be easier, with a hurricane in the center of the big wooden bowl, surrounded by pinecones and mini pumpkins. You could also choose to just use the pumpkins, an array of mini gourds, or acorns. When it gets closer to the holiday, add in cranberries.

    Your kids are going to love helping you make this one. "Faux leaves become pretty lightweight bowlsnbsp;with just a little DIY time," said Midwest Living. "Blow up a balloon the larger the balloon, the larger yournbsp;bowlnbsp;will be and rest in in anbsp;bowl. Cover the top of the balloon and the top sides of leaves with decoupage medium. Gently layer the leaves face down on the balloon, forming anbsp;bowl shape. Brush more decoupage medium on the backs of the leaves. Let dry, then poke a hole in the balloon and discard balloon.?nbsp;nbsp;nbsp;

    Another fun way to use acorns will yield pretty, sparkly finishes that look great displayed through the holidays.

    We love being able to use unconventional materials to create something special, and these mason jar lids fit the bill. Simply fasten them together and add any accoutrement you wish.


    This great vase is actually a recycled oatmeal container wrapped in rope. pgt;

    Full Story >

    IKEA Just Announced A New Pet Collection And Well Take Two Of Everything

    Admit it. IKEA is your guilty pleasure. For us, its a little like deacute;cor Disneyland, and we soak up all that Scandinavian goodness with a side of Swedish meatballs. An easy little dresser we can hack into something amazing here, an inexpensive set of pillows there. And dont even get us started on the kitchen gadget or lighting sections.

    The one thing they have always been missing: stuff to make our pets as happy as their build-it-yourself everything makes us. Until now. IKEAs just-announced LURVIG collection offers pet products for dogs and cats, including beds, couch covers, scratching posts, and accessories.

    "Have you ever felt like your cat or dog wasnt just a pet, but a member of the family? Its exactly that focus that led IKEA to make the comprehensive LURVIG pet product range," they said. "Created by pet loving designers with support from trained veterinarians, the range covers all the bases of our shared life with pets indoors and out, so you and your pet can enjoy your home together."nbsp;

    LURVIG means "hairy" in Swedish, BTW. Appropriate, no? Check out some of our faves from the upcoming collection.

    Forget that regular old dog bed. This one has a bona fide frame that raises it up from the floor and can also be used upside down for more height.

    Then, choose from an array of different cushions to complement your deacute;cor. At 7.99 to 19.99 depending on the size, you can order a bunch.

    Well also be going with the "cat/dog bed," because, who are we kidding? THATS AN ANIMAL FUTON Well take one for each room of the house.

    The cat house is practical and cute, and slips right into the KALLAX shelf unit.

    For the pooch that loves propping his head up on a pillow.

    Same color story, different graphic pattern: This dog blanket will look great on your couch, and you and your guests will appreciate how it leaves the other cushions dog-hair-free.

    Forget the ugly scratching post and protect your furniture at the same time by wrapping the legs with this LURVIG scratching mat. Even bettermdash;its only 5.99.

    A kitty hangout thats also a chic side table? Yes, please. Its actually a cat house on legs, but were not telling anyone that.

    Its not like you cant get a dog bowl at any pet store, home improvement store, Target, Walmart, and on and on. But the nicer ones can be pricey. These bowls are metal, and also have a non-slip bottom, for just 2.99

    We also like IKEAs new collection of leashes, harnesses, and collars, which are affordable, come in a range of sizes, and are made of a reflective material.

    Full Story >

    13 Decorations to Pair With Beautiful Dark Walls

    Dark walls, from inky blue to charcoal and black, are refined and dramatic - but decorating around them without making your space feel too dark can be tricky. If youve been thinking of painting one or more walls a deep, dark hue, these ideas for color and decor pairings should help.

    Natural wood. Natural wood, whether in a mirror frame, rustic tabletop or chair, helps lighten up dark walls while also emphasizing their richness. You cant go wrong with a driftwood or barn wood mirror, a farmhouse table or bentwood chairs.

    Sculptural shapes. Place anything colorful or white in front of a dark wall, and your eye will be immediately drawn to its contours. Try placing a group of pottery pieces on a console or mantel. Or highlight the shape of an unusual table or chair by positioning it in front of a deep, dark wall.

    Photo by Ingrid Rasmussen Photography - Browse home design photos

    Green plants. Potted plants and indoor trees look even lusher when placed in front of a dark wall. The dark color recedes into the background, creating the feeling of having a mini forest in the room instead of a few plants. Bonus >

    Photo by Claire Stevens Interior Design - Browse entryway photos

    Large artwork. A single piece of oversize art hung on a dark wall has the most impact - even more than a salon->

    Photo by i3 design group - More bedroom photos

    White. If you feel at all unsure about which direction to go in with the other elements in your dark painted room, choose white mdash; it always works. In this bedroom a charcoal wall is set off by a grouping of wall-mounted plants on white bases, white bedding and white window treatments.

    Photo by Honey Bee Interiors - More bedroom photos

    Pale, watery hues. Soft and ethereal, pale aqua, mint, champagne and silvery gray bring lightness to a room with dark walls. Try these watercolor-inspired hues in bedding, a throw or pillows for an elegant feel.

    Photo by Louise de Miranda - Discover bedroom design inspiration

    Rich mustard and teal. These hues complement deep blue, gray or even dark chocolate walls by bringing in the colors of fall. Just a small touch of mustard, teal or both hues will do mdash; try a throw, pillow covers or curtains.

    Photo by Breeze Giannasio Interiors - Browse powder room photos

    Wild card pairing: brights. A flash of hot pink, neon yellow or vibrant turquoise is daring - and exciting Brights work best with black or charcoal; adding these bold hues to a room painted another dark color like navy or forest green is riskier. Test out a fun color pairing with a low-cost addition like hand towels or a cluster of bright vases.

    Mirrors. Dark walls in a room without much natural light run the risk of making it feel oppressive. Boost what light you have by adding mirrors - even small, decorative mirrors, like the ones shown here, can help lighten things up. If the room is very dark, add a larger mirror, either on the wall or leaning against it.

    Photo by Jessica Helgerson Interior Design - Search bedroom pictures

    Acrylic and glass. Like mirrors, clear materials, like acrylic and glass, can help a dark space feel a bit lighter. Swap out a wood piece, like a console, for a glass or acrylic version. Or add a large glass vase filled with greenery for a quick boost.

    Photo by Tamara Magel Studio - More bedroom ideas
    Photo by Rikki Snyder - Browse living room photos

    In this living room, dark gray walls are lightened up with a glass coffee table, an acrylic TV stand, white trim and a light sofa and rug.

    Photo by Jessica Helgerson Interior Design - Search family room design ideas

    Rich texture. Dark walls call out for touchable textures, like velvet, silk, oiled wood and fluffy mohair. Consider a plush velvet sofa, velvet or silk accent pillows, or a mohair throw in a living room with dark walls.

    Photo by Oak Hill Architects - Search dining room pictures

    Oriental rugs. Rolling out an Oriental rug is a good way to marry a daringly dark wall color with a traditional home. These carpets tend to include a range of rich, deep colors, lending them well to dark walls in just about any hue.

    Antiques. As with using traditional rugs, bringing in an antique piece or two is a wonderful way to take the edge off a strong wall color. In the room shown here, dark walls look refined alongside an eclectic mix of antiques and modern Lucite chairs.

    Also See:

    • Why Golden Pothos Make the Best Indoor Plants
    • Add Little Pops of Color With These Beautiful Vases
    • Stylish Wall Mirrors to Lighten Up a Dark Room

    Full Story >

    The FAFSA And Real Estate: When To Buy And Refi To Get The Most Aid For College

    Getting ready to fill out the dreaded Free Application for Federal Student Aid FAFSA? Its the form that strikes fear in parents of college students and college students-to-be who have been cautioned about the tedious process involved, and the disappointing results. And while there is a ton of advice out there about how to properly prepare, what you need, and what to expect, theres another layer of concern for homeowners and homebuyers: How does the FAFSA affect you if youre in the market, already own a home, have investment property, or are thinking about refinancing? Were breaking it down.

    First, a little bit about the FAFSA for those who have not yet had the pleasure: "Based primarily on your familys income and assets, the Expected Family Contribution EFC qualifies students for federal grants, loans and work-study programs," said Bankrate. "The purpose of the FAFSA is to calculate your expected family contribution, or EFC - the amount the government believes your family can contribute for college that year."

    The good news for homeowners getting ready to fill out the FAFSA is that a principal residence is not reported as an asset. But, other real estate holdings may count as assets and may reduce your financial aid award.

    Rental income

    If you have a small business that is both owned and controlled by your family and has fewer than 100 full-time or full-time equivalent employees, it is not a reportable asset. However, income from a rental property cannot be included as a small business.

    "Rental properties are a popular tax and investment strategy among parents, but they do not qualify as a family controlled small business asset that can be excluded from the FAFSA," said Forbes. "Dont make the mistake of thinking that you can just throw your rental properties in an LLC and exclude the value as a small business on the FAFSA."

    Real estate can be reported as an asset on the FAFSA as either investment real estate or business/farm assets. "For real estate to be considered a business asset, it must be used in the operation of the business, not incidental to it," said Fastweb. "Sub-regulatory guidance published by the US Department of Education indicates that, A rental property would have to be part of a formally recognized business to be reported as such, and it usually would provide additional services like regular cleaning, linen, or maid service. This is similar toIRSguidance concerning whether rental income from real estate must be reported on Schedule E or Schedule C ofIRSForm 1040."

    If youre unsure of whether to report rental income as a business asset or investment asset, there are some rules of thumb that you can read about here, but the best course of action is to consult with your accountant or tax attorney. Keep in mind, though, that reporting real estate as a business or farm asset has "less of an impact on the students expected family contribution EFC than investment assets."

    Shifting assets

    Because your principal residence is not a reportable asset on the FAFSA, it doesnt matter how much equity you have in your home; whether the house is worth a mere 100 more than when you bought it or you have 300,000 worth of equity, it wont count against you.

    Paying down the balance on your home prior to applying for the FAFSA is one of the strategies recommended by financial professionals for those who need to lower their cash on hand and savings. "To get the most financial aid, consider shifting some assets from reportable categories into nonreportable ones before you sit down to fill out your FAFSA," said TIME Money. "For example, you might use some money from reportable assets like bank accounts and mutual funds to pay down the mortgage on your home, which doesnt count as an asset on the FAFSA."


    But, home equity can come in handy in another important way: tapping into it can be a smart move if youre low on funds and need to find a way to pay for college, especially if the interest rate is lower than a federal Parent Plus loan or a private education loan.

    Refinancing, and, especially a cash-out refinance, can be especially tempting if you have an interest rate that is higher than what is currently being offered. A cash-out refi would readjust your rate hopefully to something lower than what you currently have and give you money that could be used to pay for college tuition. But, there are issues associated with this type of refinance that may make you think twice, like the upfront disbursement.

    "This yields a lump sum in advance, years before the money is needed," said fastweb "The interest rate may be very low, but the borrower will pay interest on the loan for many years before the money is needed to pay for college bills. Interest begins accruing from the date of disbursement. Another problem with a cash-out refinance is that the money will be counted as a parent asset until it is used, reducing eligibility for need-based financial aid."

    For this reason, a home equity line of credit HELOC is often the preferred refinancing method for those looking to use the funds for college.

    "In a climate of lower housing interest rates, a home loan might seem like an attractive option for some parents to help shoulder the cost of paying forcollege," said US News. "A HELOC is a type of home equity loan that allows borrowers to borrow a line of credit against the value of their home - it operates almost like credit card and usually has a floating interest rate. A borrower can limit the amount to just whats needed under a HELOC compared with a home equity loan, which requires taking out a lump sum. The minimum amount for a home equity loan can range between 10,000 and 25,000 at lending institutions, home loan experts say."

    Be aware, though, that, a HELOC may be counted toward yourEFC. Because of this, the timing of taking out the loan and filling out the FAFSA is critical. Waiting until after you file the FAFSA to take out the loan, or timing it so the proceeds of the HELOC do not hit your bank account until after you file, can protect these funds from being counted against you and having your need-based aid reduced.

    Getting ready to buy a house

    If youre in the market and wondering you to manage the timing of your home purchase and FAFSA filing, youll be pleased to know that buying now will likely help you when it comes to getting money for college. In determining your need-based aid, any money you currently have set aside for your down payment and closing costs would be used to reduce the amount of aid awarded. Putting it into a home improves your financial picture, at least in terms of the amount of help you can get for college.

    The FAFSA has questions that "ask about how much cash students and parents have in savings and checking accounts atthe moment you are filling out the FAFSA," said TIME Money. "But notice that there are no questions on the FAFSA about your debts or bills."That means that sheltering your money in real estate, so long as that real estate is the only property you own and you intend to live in it, is a smart move.
    Full Story >

    How Much Do Home Alarm Systems Affect Resale?

    Home alarm systems can be particularly hard to calculate into resale value or return on investment ROI because their job is to prevent loss rather than achieve gains. You purchase a home alarm system with the hope that you never need to use it.

    The reality is that a burglary is reported to police every 14.5 seconds. But robbery isnt the only thing that alarms can save you from. Smart alarms can detect smoke and hazards.

    More than ever, homeowners want to feel safe in their homes. A built-in alarm system may be just what it takes to get your house off the market.

    1. Alarm Systems Arent as Expensive as They Used to Be

    According to HomeAdvisors survey, most homeowners invest between 330-1,040 when purchasing and installing home alarm systems. However, with the advent of smart, connected technology, home security is more affordable than ever.

    Products like the Nest Cam Outdoor monitor your home in 1080p high definition video that you can access from your smartphone 24/7. This monitor also has a two-way audio feature, meaning you can use your voice to scare off intruders or give live instructions to a delivery service. Smart products allow you to monitor your home yourself, which cuts down the cost of hiring a security company to do the monitoring for you.

    Smart products send security alerts right to your phone, allowing you to act fast and take control. Monthly security subscriptions on smart products are usually a fraction of the cost of subscribing to a traditional security service.

    2. Add Resale Value

    Owning a safe and secure home is appealing to every home buyer, from frequent travelers to families. That means pre-installed cameras, smoke detectors, and smart locks can be huge selling points. The more convenient and easy-to-use the security, the better.

    One of the most desired security features for homeowners is motion sensor lighting over the driveway. Not only does it scare away late-night intruders, it also helps homeowners navigate in the dark. Buyers want added safety and convenience in their everyday lives, and the right security system can provide both.

    3. Home Security Lowers Neighborhood Crime

    In 2016, Rutgers University >

    Burglars are less likely to break into homes that are protected with home security, and that fact carries over when applied to entire neighborhoods. Safe neighborhoods are highly desirable to homeowners and can help your home sell faster and at a higher price.

    4. Alarm Systems Can Reduce Your Homeowners Insurance

    If you financed your home with a mortgage, you are most likely required to have home insurance. While the price of home insurance varies, most companies offer discounts to homes with security systems.

    With a home monitoring system installed, you can save up to 20 on home insurance. Those savings can amount to hundreds of dollars per year or the cost of the security system all together.

    5. They Save Money in the Long Run

    Burglaries can cost you, not only in the possessions stolen from your home, but also in the damage that many homes incur during a burglary.

    Most burglars enter homes through the front or back door or first-floor windows, usually breaking them in the process. The cost of fixing a broken window or kicked-in door can be even more expensive than the valuables taken.

    It was found that when burglars enter homes with security systems, they are much more likely to leave quickly, taking fewer items with them.

    While security systems arent foolproof, they do offer the benefit of safety and security. Whether youre installing a system for yourself or for future homeowners, the peace of mind it offers is the ultimate ROI.

    Written By: Katy Caballeros
    Full Story >

    Protecting Community Associations Against Money Loss

    Qustion: I am the President of a 135 unit condominium association and have just read that a local Property Management company has been the victim of an embezzlement. I understand a lot of condominium money that was held by the Management Company may have been lost. What can our association do to protect ourselves against such events?

    Answer: In my law practice, I have represented at least two property management companies that went out of business in this area, leaving behind a trail of unpaid bills and large losses from community associations reserve and operating accounts.

    There are many ways in which to protect your association funds.

    First, before you hire a property manager, make sure the firm is licensed in the jurisdiction where your property is located. However, not every state requires a license.

    Second, check out the property manager carefully. Perhaps you should even obtain credit reports on the firm and the property manager who will be servicing your project; this will, of course, require the permission of the manager, but they should not object if they want your business.

    Third, keep control of your funds. Generally speaking, there are two pools of moneys in community associations: operating accounts and reserve accounts.

    Regarding the operating account, set a dollar figure above which the property manager will need the co-signature of at least one board member on all checks going out of that account. This will, of course, create a burden on both the property manager and the board member who has to sign checks. But, in my opinion, if you want to serve on the board, you should be willing to assume those responsibilities which will protect the funds belonging to the unit owners who elected you -- and yourself as well.

    Clearly, there are routine checks that have to be paid on a monthly basis -- such as water bills, insurance, and trash collection. If you set a dollar limit such as 1,000, the property manager can write checks up to that amount without a second signature. But any checks over that limit must be co-signed by at least one board member. Your bank will give you signature cards and these requirements should be spelled out in those documents. Then, the bank will have to honor your request.

    Regarding the reserve accounts, they should only be in the name of the association and only board members should be authorized to sign checks or transfer funds from those accounts. Community associations do not transfer moneys often from reserve accounts; it should not be a hardship on anyone to require that only board members be authorized to have access to those funds.

    Fourth, make sure the property management company has adequate insurance covering your association in the event of embezzlement, fraud or other activities which may cause your association a loss. The insurance industry will write "third party coverage" bond insurance which will give you protection in the event of a loss. The amount of the policy will depend on the amount of the reserves you anticipate you will carry. Some associations have hundreds of thousands of dollars in reserve; clearly, third party coverage in the amount of 50,000, for example, is woefully inadequate for those associations.

    Fifth, make sure that the management company has a fidelity bond in place covering any loss created by its employees.

    Sixth, make sure that you and not the property manager hire an accounting firm to give you a full audit each and every year. Your association should give a letter of engagement to the accountant, and the accountant should report back to you -- and not the manager.

    Seventh, and perhaps most importantly, insist that the property manager give you and your board members a monthly financial status report, which will include copies of the actual bank statements received by the management company. Review these carefully every month within five days from receipt. Keep in mind that every board member has a fiduciary >Most property managers are honest and hard-working. However, one dishonest manager will unfortunately cast a broad brush of distrust on the entire industry. I do not believe that property managers will object to the various suggestions I have made, and indeed may have more recommendations of their own.

    Several years ago, the United States Attorney in New York indicted a large number of property managers there. Clearly, not all were involved in community association management. However, the lesson to be learned from New York and from the two incidents in the Washington area is quite clear: when there is money there will be greed and corruption. Community association board members have the power to control -- as best they can -- the financial security of association funds, and steps should be implemented immediately, while it is not too late.
    Full Story >

    Earmarking Reserves In Your HOA

    Most homeowner associations are entrusted with substantial common elements which must be maintained, replaced or renewed. All of this costs a lot of money. Borrowing said money is a very bad idea because it comes at a very high price in the way of interest and fees which must be repaid along with the principal. The cheapest and fairest way to pay for these expenses is to earmark a portion of the monthly, quarterly or annual fees and hold this money in reserve for future expenses. A properly done reserve study will inform the board how much the earmark should be so that all pay a fair share of a 30 year plan. If this is done, special assessments are never needed and the board has the money when needed.

    But keep in mind that even the best reserve study has its limitations. While it predicts likely useful life spans and replacement costs, it cant guarantee either one. A reserve study is based on assumptions that change over time. The climate, weather, soil conditions, maintenance, design and construction quality play a role in the aging process, causing some components to age differently than expected. The financial climate is also variable. Investment earnings and the inflation change. To keep the reserve study accurate, industry experts recommend and state statutes often require that the reserve study be updated annually.

    How Much Do You Need? The reserve study will estimate how much money is needed for future projects and when the funds will be needed. For the typical garden >Communicate with Owners. For HOAs that are not currently contributing enough to reserves, the solution is to start contributing more by increasing the monthly fees. Lenders shy away from HOAs which have little or no reserves but it negatively impacts a lenders collateral. Once the reserve study is completed, provide owners with a copy and encourage them to read it. Hold a special meeting and invite the reserve study provider to explain it. Make sure owners understand the reserve funding schedule and emphasize the >Dont Commingle Funds. Reserves should not be used to pay for ongoing preventive maintenance and repairs. Those should be paid out of the operating budget. Reserve funds should be segregated in a special bank account apart from operating funds. Typically, the portion of HOA fees earmarked for reserves is swept into this separate account monthly. Only reserve >Borrow Reserves Funds Carefully. Borrow from reserves only in an emergency or because of seasonal high expenses like an insurance premium that comes due early in the year and not enough fees have accumulated yet to pay it. If you must borrow, document the board vote approving that decision, establish a reasonable repayment plan and stick to the plan.

    Develop a Reserve Investment Plan. Reserve funds are typically placed in FDIC insured savings accounts, money market accounts and Certificates of Deposit. Most state laws dont have specific reserve investment standards for homeowner associations. The governing documents usually give the board investment discretion. Boards should develop a written investment policy that defines the investment goals, establishes the objectives against which the investment performance will be measured, and identifies the boundaries within which investment selections will be made.

    The investment policy should include:

    • Keep the reserves safe dont risk the principal.
    • Preserve earning power by choosing investments that match or exceed the inflation rate when possible.
    • Ensure that the funds are available when they are needed.

    Other issues to consider include:

    • Consider working with an investment professional. This is particularly important when the reserve fund is large.
    • Remember that this is OPM Other Peoples Money. Tread carefully.
    • Document the investment decisions in meeting minutes.
    • Diversify the investments savings, CDs, etc.
    • Focus on liquidity. Industry experts recommend holding 5 of reserves in cash for emergencies, another 10-15 in short term six months or less securities and the rest spread among varied investments with varied maturities. The reserve study provides the schedule for work and projected cost for investment planning.
    • Review your investment strategies annually to make sure they still match near and long term goals. Dont let cyclical changes in the market alter the investment strategy which should remain long term.

    Maintaining adequate reserves is a fundamental part of the boards fiduciary duty. Make sure to earmark the budget for reserves.

    For more innovative homeowner association management strategies, see
    Full Story >

    Condo Renovations: Making The Most Of Your Space

    In real estate, nothing ever stays the same. In Toronto, the types of condo buyers are constantly changing, says real estate agent Cynthia Goodchild of Royal LePage Real Estate Services, Johnston and Daniel Division.

    Many buyers are now families or young couples with a baby on the way. They dont want to rent but cant afford to buy a house. Or some, regardless of age, dont have the time or inclination to maintain a home.

    Condo suites are smaller than they used to be, so it pays to renovate to make the most of every inch and to make the space functional for everyday living and entertaining.

    Designer Sabrina Bitton, an expert in all things space saving and clever, recently transformed her 825-square-foot suite into a showpiece of good, functional, flexible and space-efficient design. Her suite offers the clean-lined and less-is-more sensibilities todays buyers want.

    She embraces European design, with a dash of Frank Lloyd Wright bringing the outdoors in while ensuring no space is wasted, she says.

    Her original two-bedroom suite had large windows in the living room and master bedroom, the rooms side by side at the end of the suite. Bitton removed the master bedroom wall and incorporated the square footage and windows into the living space.

    She sealed up the doors to the walk-in closet and ensuite bathroom and lined the walls with floor-to-ceiling custom millwork. Instead of extending the built-ins to the end of the living room wall, she added open solid walnut shelving to provide an airy feeling and to offer a place to display treasured items.

    Walnut is used for several features throughout the suite, bringing a touch of nature and creating a sense of flow between rooms.

    The kitchen includes walnut shelving and a walnut island. To create maximum storage space, Bitton took advantage of the nine-foot-high ceilings and extended the built-ins to the ceiling. The high space is ideal for storing large boxes of out-of-season clothing and seasonal items that dont need to be accessed on a regular basis.

    Vents for heating and cooling are hidden behind cupboard doors and kick plates, with slits to keep the air circulating.

    Storage space is always a challenge in condos, so finding creative ways of adding more makes the unit more functional. "I have so much storage space that some cupboards are actually empty," she says.

    A clever "Bitton trick" is a bar-height island on wheels that fits over the existing kitchen island so it doesnt take up additional floor space.

    When entertaining be it for a sit-down dinner for eight, a buffet or a large cocktail party, the bar-height island can be wheeled out to provide a separate table. Or it can be used as buffet space, a place to enjoy cocktails or additional work space.

    Downsizers who arent ready to give up their sit-down eating space find this a particularly welcome idea, Bitton says.

    She chose bar stools with lower backs so when theyre tucked under the bar, they dont obstruct the view from the kitchen. Bitton added a clear rectangular blown glass chandelier over the island to add drama without distracting from the view.

    Seamless, clean-lined built-ins on another wall in the living/dining space include a fold-up desk, and a surprise. Instead of hard-to-reach cupboards at ceiling height, Bitton added pull-down rods so hanging clothes are easily accessible.

    When renovating, figure out what you want, how to achieve and what you want to invest your money on. Bitton splurged on a comfortable sofa.

    "Comfort is important. Also, since its a linear space, the curved couch adds a feeling of movement. You could also add an additional sleeping area by using a sofa bed."

    In the second bedroom, which is beside the original master bedroom, a door was added to provide access to the walk-in closet and ensuite bathroom. More custom built-ins were added in the closet.

    In the bedroom, the original closet doors were removed and the closet space was lined with walnut to create a headboard/nook for her bed. The window seat was extended from 18 to 24 inches to create a cosy sitting area. Custom built-ins were installed below the window seat and extended along the wall. An unused alcove space was filled with shelves and glass doors to create a fun display space for Bittons fancy shoes.

    Light-coloured floors are used throughout, chosen over dark, which shows dust and visually closes in a space. Paint and window treatments are different tones of the same creamy neutral colour family. Doors are painted light grey to complete the Zen ambiance.

    Before buying a new condo, Goodchild says its important to speak to the builder to find out what changes can be made. You may not want the kitchen thats there or would prefer to omit a wall, but the builder may not be able to accommodate your needs.

    Few developers will allow preconstruction changes. In that case, choose the least expensive finishes for features you plan to remove, and then renovate with an eye to creating functional and multi-functional space, says Bitton, of Sabrina Bitton Interior Design. "Its all about creating smart condos."

    Times have changed from 20 years ago, when condos were purchased primarily by retirees, Goodchild says. Now people in their 50s are buying too because they want less upkeep, more freedom and the ability to do more of what they want, including travel.

    "Retirees still make up a large percentage of purchasers, but the under 35-year-olds find condo ownership appealing because they want to be downtown and be close to work. They want to have the ability to work, live and play in the same neighbourhood," Goodchild says. "Then they have children and sometimes stay."

    Whoever the buyer, making the most of the space is key, says Bitton, who along with in-person service, offers Skype design consultation. A portion of her fee goes to charity.

    Full Story >

    Real Estate Cyberfraud Continues. Is It Time To Return To Paper?

    Cybercrime continues to thrive in the real estate brokerage environment. By this, I dont mean the kind of electronic skullduggery that results in stolen identity information or hacking into someones bank account. Rather, I refer to the business of fraudulently inducing a principal -- sometimes even an escrow officer -- into wiring funds to a bank account controlled by a hacker or someone in business with the hacker.

    Heres what can happen: the hacker gains access to the "network" of participants involved in a real estate transaction. His entry point may be through a real estate agents email account, or escrows, or any one of a number of affiliated services such as title or home warranty. Certainly, the hacking of an agents account seems the most likely. The hacker will monitor the transaction, learning all the names, phone numbers, and financial information involved. Then, at some point near closing, the hacker will send an email -- posing as one of the >More frequently, this kind of theft is occurring at the beginning of a transaction. One scenario is this: the hacker is monitoring electronic communication between the buyers agent and the sellers agent and between the agents and their principals. Shortly after a purchase is agreed upon, the hacker sends the buyer an email appearing to have come from his agent telling him where to wire the earnest money. That will be to an account controlled by the hacker.

    The scam at the beginning of a transaction doesnt generally yield as much money. It is deposit money, not a down payment. But it takes less time and saves watching an escrow that might fail anyway.

    California REALTORSreg; have available to them a useful one-page document entitled "Wire Fraud Advisory." We have discussed that in an earlier column July, 2016 and need not review it here. Instead, it is important to focus on the use of the form.

    Two things: 1 As the above scenario illustrates, the advisory -- read "warning" -- should be provided early on in the process. Just as agency >2 It should be given singular attention, not simply included in a pile of papers with "you should read these" instructions. The issue needs to be addressed.

    Some companies have their own version of the advisory, which is fine -- as long as they are provided in a timely and focused manner.

    Indeed, some companies are now advising their clients to use cashiers checks, rather than to trust the electronic handling of their funds. Is that just too impossibly retro for you? Well, it made sense to some of the people who recently attended the most recent meeting of the Directors of the California Association of Realtors CAR.

    The topic of wire fraud received extensive discussion; and one group was formulating a request for the Standard Forms Committee to revise its treatment of earnest money deposit in the standard purchase contract Residential Purchase Agreement, RPA. As it is now, the default position in the RPA is that deposit funds will be provided by electronic transfer. One can still choose an option of personal check or cashiers check, or cash for that matter.

    Brokers initially loved the electronic transfer -- and probably most still do -- because it >Speaking of which, it emerged in other discussions that brokers need to do a thorough assessment of their risks in this regard. It turns out that more than a few insurance policies that have an electronic fraud provision dont, in fact, cover the kind of fraud and loss that has been discussed here.

    A topic for another day.

    Bob Hunt is a director of the California Association of Realtorsreg;. He is the author of Real Estate the Ethical Way. His email address is .
    Full Story >

    Benjamin Moores 2018 Color Of The Year: A Modern Guide To Using Red In Your Home

    Neutrals, be gone If Benjamin Moore has its way, interiors will be going from soft and soothing to red hot next year. The paint companys Color of the Year for 2018 is Caliente, and the name is appropriate. The fiery red is "hot, passionate, and sexy," said Benjamin Moore. With a hint of orange,nbsp;calientenbsp;has lots of personality and is the perfect hue for you if you are drawn to the warmer tones of red.

    The companys Director of Strategic Design Intelligence, Ellen ONeill, weighed in by adding, "Strong, radiant and full of energy, Caliente AF-290 is total confidence. It is pleasing, passionate and makes people feel special, like red carpet treatment. "Whether used as one note or on four walls, the spirited personality of red turns heads signaling surprise and adventure. The eye cant help but follow its bold strokes."

    Indeed. Architectural Digest believes that, "This years choice will stop you in your tracks." Whether or not youre a fan of red, youre bound to notice it. Red can be a polarizing color, with some loving the energy it brings and others finding it a tad too bold for their space. The key to making it sing in your home is knowing where to use it, and how much.

    Feng Shui

    If the principles of feng shui are important to you, consider that red conjures fire and, "Fire represents the energy of sun and life," said The Spruce. "A balanced feng shui fire element in your home will bring joy, excitement, and strongnbsp;sexual desire. An imbalance of the same element will bring either fiery arguments, restlessness and even aggression too much Fire or a lack of energy and enthusiasm for life too little Fire."

    When it comes to the home, red "signifies richness, luck and luxury," they said. "If used too much, though, it can bring bursts of anger and over stimulation." That means a cautious hand may be best. Covering the walls in every room and oversaturating the spaces with furniture and deacute;cor pieces could just be a bit too caliente.

    Color Theory

    We know from the study of color theory that different colors can affect moods. If you apply that to the home, it makes sense that some spaces would be a better fit than others for a color called caliente.

    "Rednbsp;raises a rooms energy level. The most intense color, it pumps the adrenaline like no other hue," said Freshome. "It is a good choice when you want to stir up excitement, particularly at night. In the living room or dining room, red draws people together and stimulates conversation. In an entryway, it creates a strong first impression." In the bedroom, it could mean a fiery sex lifehellip;but trying to sleep might be an issue.

    You may not be ready to take the bold hue through your whole kitchen, but careful placement can make a huge impact, like on this island.

    Juxtaposed against bright white, Caliente is a standout on the walls - especially in a room that flooded with natural light.

    Hows that for a warm welcome? The rich, red door is a beautiful complement to the neutral deacute;cor and adds another element of interest in a space with a wealth of architectural detail.

    Dont want to splash this color on your walls? One standout piece in the electric hue can energize the whole room.

    Full Story >

    Halloween Decor Trends For An Elegant Interior

    Halloween stores are popping up all over the place as the countdown to candy collecting begins. Halloween dcor is big business today, too, and while some OK, a lot of it can look cheap and childish, there are many options for pumpkin dcor that allow you to be festive without veering away from your sense of >Pretty pastels

    Who says your pumpkins have to be orange or that your fall dcor cant be fun and fresh? This six-piece pastel pumpkin mini mix from Etsy is handmade from white craft pumpkins, meaning you could DIY it if you wanted to. But when they look this great...


    These galvanized metal lanterns from World Market offer anther unique way to dress up your home for Halloween, but with an unexpected elegance. Even better - theyre on sale for 6.99 to 10.49.

    World Market offers a treasure trove of items for Halloween. We also love these black iron candelabras, that just may be elegant enough to use all-year-round. If Day of the Dead is more your speed, youll love this 19.99 los muertos ceramic candy bowl that depicts four highly detailed calavera skulls.


    Feeling artistic? All you need to create a pumpkin masterpiece is a little paint and a flick of the wrist. These splatter paint pumpkins have a chic >


    Dont want a face on your pumpkins but still want some time knife time? These patterned pumpkins are next-level carving and create unique methods for mood lighting. "Turn standard grocery store pumpkins into decorative votive holders that are embellished with polka-dot cutouts," said Southern Living.

    Break out those crayons

    Your kids will love watching the crayons melt over the pumpkins, and youll love the outcome of this easy DIY project that produce oh-so-stylish Halloween dcor.



    Mercury glass

    You can buy pumpkins that look like mercury glass, but theyre fragile and can also be expensive. This easy trick gives you the look without the hassle. First, spray paint them white and then use a "looking glass" spray to get the mercury effect.


    Texture is all the rage in home dcor and fashion, and it hasnt escaped Halloween dcor. These velvet pumpkins are one of the hottest items this year, and theyre all over the board in terms of cost. We saw one for almost 100 at a posh boutique Save yourself some money, and a whole lot of hassle since this is not one of the easier DIY-friendly crafts unless youre very experienced and very patient, and head to Target. This three-piece collection is just 18, and theres no orange in sight

    Full Story >

    Tips For Decorating Rooms That Are Long And Narrow

    Distract attention away from an awkward room shape and create a pleasing design using these pro tips.

    When youre clicking through images of gorgeous rooms to gather inspiration for your home, does it sometimes seem as though the ideas will work only in large or pleasingly proportioned rooms? The truth is, when a room is well designed, we dont notice when its awkwardly shaped. Here, three interior designers share their tips for dealing with a common type of awkward space - a long, narrow room.

    "The challenge you face with a long, thin living space is to ensure the room feels welcoming, inviting and free flowing," says Letiche Black of Amberth. "You want to avoid it looking too static or formal."

    Make sure the seating area doesnt feel too far away from the TV and other necessities.

    "The biggest challenge will be not to feel obliged to push everything against the walls, because you will only emphasize the narrow shape and corners and be left with a slim walkway," she says. "The space will feel tight and cramped instead of open and light."


    Photo by Francesco Pierazzi Architects - Search living room pictures

    Diana Greenhalgh of My Bespoke Room suggests creating areas of color, as in this room. "These will draw the eye to certain points around the room to help break up the space," she says.

    Photo by Randell Design Group - Look for bedroom pictures

    Maximize space with >. Greenhalgh suggests making a feature of details that will maximize the feeling of space in a narrow room. "Space-saving solutions such as small shelves instead of bedside tables, and hanging pendant lights instead of bulky bedside lights, can help make the most of the available space, and also assist by creating an interesting focal point," she says.

    Photo by Amberth - Discover living room design inspiration

    Focus on lighting. In a long, thin living area, Black recommends putting seating areas near the main natural light source. "This will influence how you design the rest of the space and encourages a loose placement of other furniture," she says. "Position armchairs away from the wall, as this tricks the eye into believing the space is much wider."

    Photo by Alex Findlater Ltd - Discover living room design ideas

    Section it off. "Break a long room into sections by cleverly placing furniture," says Charlotte Ford of Cotton Tree Interiors. "Console tables are really useful when placed at the back of a sofa," she notes. "And if possible, get some floor-mounted sockets, so lamps can be put on them to bring in subtle lighting and create a soft divide." She also advises looking at the size of your furniture. You can buy slimmer sofas and other scaled-down pieces that will fit well in the space.

    Photo by Zephyr Interiors - More bedroom photos

    Take the textural route. Black suggests introducing plenty of texture into a thin room. "Create layers and warmth that will allow your senses to be met with an arrangement of smooth, rough and shiny surfaces, instead of lonely corners," she says. "Use mirrors too, as these will help the space to feel wider." In a bedroom, Greenhalgh advises considering the position of the bed with care, as it will probably be the focal point. Placing a bed at the end of a narrow space, as seen in this room, plays up the rooms shape in a stylish way.

    Photo by Sigmar - More bedroom photos

    Open up. In a narrow bedroom, Black says, choose colors that make the space feel wider and brighter. "It is important to be mindful of the space as a whole, ensuring one end doesnt get neglected or feel darker than the other," she says. "Dont be tempted to simply position your bed, desk and other furniture all down one wall, as you will only add emphasis to the long, narrow shape of the room." She suggests using warm, light grays, off-whites and whites. "These shades instantly create a brighter, more open space," she says.

    Photo by Inigo amp; Co. - Browse living room ideas

    Distract the eye. "Use neutral window treatments, as drawing attention to the boundaries at either end of the room only emphasizes its shape," Ford says. "Use pattern, texture and color on occasional chairs, cushions, lampshades and art and also carefully positioned wallpaper, all of which take the focus off the shape of the room and direct it on to the more interesting objects."

    Photo by Cotton Tree Interiors - Search home design pictures

    Find your focal point. One of the difficulties in decorating a narrow room is deciding where the focus of the space should be, Ford says. If you are working with a builder, ask to create subtle room dividers. "Full-length narrow columns break up the room, giving a natural finishing point when using different wallpapers and paint colors," she says.

    Photo by bulthaup by Kitchen Architecture - Look for living room design inspiration

    Dont be afraid of the dark. "If the room is dark due to lack of windows," Greenhalgh says, "go with it and embrace a dark color palette to make the space cozy, rather than trying to fight it."

    Photo by Henry Woide - Look for bedroom design inspiration

    Go round. Choosing accessories in shapes that go against the linear nature of a long room mdash; such as circular forms mdash; is another trick to visually widen a space. "Avoid stripes, as these will only enhance the long, thin feel," Greenhalgh says.

    Photo by My Bespoke Room Ltd - Search living room pictures

    Avoid the "corridor effect". "Choose items that can be positioned to break up the feeling of a long, thin room, such as small coffee tables, side tables or armchairs," Greenhalgh says. "Break up the corridor effect by positioning pieces of furniture in clusters, instead of in a row." This tricks the eye into seeing a wider space. "For example, pick different seating options and arrange them together, instead of having just one long sofa against the long wall," she says. And dont be afraid to use bold furnishings, fixtures and fittings, Black advises, noting that they will add visual interest.

    Photo by TLA Studio - Discover bedroom design inspiration

    Light it right. Bedroom lighting needs to be well considered in a narrow space, as there often isnt sufficient surface area for table lamps. Ford suggests installing downlights, as they spread the light across the room. Then, if you have the luxury of enough space, "have a softer, secondary lighting plan with a combination of bedside lamps, reading lamps and table lamps," she advises. Wall-mounted reading lights can also help to declutter bedside surfaces where space is tight.

    Photo by TG-Studio - Browse bedroom photos

    Get horizontal. When deciding on the position of the bed in a narrow room, if space allows, "break up the space by positioning the bed across the width of the space instead of up against the length of one," Black says. Sometimes, however, you have no choice but to position the bed going with the length of the room and facing the door. And there are benefits to that. "It feels welcoming and will take your eye off the shape of the room," she says. "Especially if you use lots of pillows to add comfort and warmth."

    Also See:

    • Space-Saving Table Lamps for the Bedroom
    • Use a Floor Mirror to Visually Elongate Any Space
    • Bookmark These Trending Living Room Ideas
    • Decorating 101: How to Shop for Furniture
    • Ask an Expert: How to Decorate a Small Spare Room

    Full Story >

    Home Foundations And Why Material Matters

    The typical single-family home can weigh anywhere from 80,000 to 160,000 pounds. Foundations provide a solid base for a homes weight, help to ensure the house stays level and provides anbsp;base for construction to take place. Foundations matter, and so does the material that theyre made of. Heres a closer look at both, starting with materials and why they matter.

    Before buying or constructing your dream home, its important to be familiar with foundations to help you better understand how to prevent damage or make necessary repairs. Lets start with materials and why they matter.

    Foundation Materials:


    The most common material used to create a homes foundation is concretemdash;by far. Typically poured or constructed with a series of cinder blocks, concrete is fairly inexpensive, easy to find and produce, and strong. Although poured concrete is prone to cracking, these repairs are often affordable and easy to have done, especially if it is being done from the interior.

    Drawbacks of concrete vary based on the type of foundation. Cinder blocks may buckle over time and can involve expensive repairs. Poured concrete requires a mixer on site to perform installation. This meansnbsp;installation costs can escalate if a concrete facility isnt close by.

    Pre-Built Walls

    Pre-built walls typically consist of studded wall construction thats been coated in a concrete layer. It installs quickly, is always level and makes discovering problems easier. However, pre-built walls are more expensive than other types of foundations.

    Stone and Brick

    Laid stone and brick are two other foundation types commonly found in older homes. Stone foundation usually isntnbsp;equipped with the right type of drainage systems. Brick foundations, though typically thick andnbsp;adequate, tend to degrade over time and are also prone to mortar issues.

    Foundation Types

    Foundations dont just come in many materials, they take different shapes. Lets take a look at the three most popular foundation types -- slabs, crawlspaces and basements:


    Cold weather climates are the most popular location for basement installation. This is because the foundation of the home needs to exist beneath the frost level in order to sufficiently support it. Theyrenbsp;typically made of poured concrete, and many also serve as a place where home appliances are located i.e., hot water tanks, furnaces, washing machines, etc.. Occupants often take advantage of the extended headroom to turn the area into additional living space.

    Prone to flooding, fully underground basements can be costly if your yard doesnt quickly absorb or drain rainfall. Basement walls and floors are also susceptible to cracking, which require repair to keep moisture out and maintain structural integrity.


    A slab is nothing more than poured concrete that exists on a grade of land. This type of foundationnbsp;is particularly popular in warmnbsp;weather climates, where water tables are higher. Its installed about a foot underground and usually reinforced with steel.

    Slabs are a cheaper type of foundation and, unlike a basement, reduce flooding risk. However, slabs are prone to cracking and can also provide difficulties for incorporating heating and cooling ducts into the home.


    Crawlspaces are foundations that exist beneath a home with limited headroom. Though headroom is at a premium, itsnbsp;typically enough to store certain appliances, piping, ductwork and more. The majority dont permit the additional living space of a basement because theyre approximately two to four feet high.

    Installing a crawlspace is cheaper than a basement, but more expensive -- yet more functional -- than a slab. Other big disadvantages include susceptibilitynbsp;to moisture issues and serving as a favorite place for pests and rodents to seek shelter in. The good news is, you can waterproof your crawlspace.

    Worried that your foundation may be in need of repair? According to this article on HomeAdvisor, signs that your foundation needs attention include misaligned exterior doors and windows, cracks in stonework, sheetrock, and floors, bulges in the floor, or interior doors sticking or jamming. Consult a professional if you think your foundation is in trouble.

    Full Story >

    Is Your Millennial Real Estate Game Lacking?

    Maybe its time to adjust your strategy.

    "They have to give up their coffee three times a week."

    "They need to keep their car until its paid off and then continue to drive it for years."

    "If they really want to buy a house, they need to change their life>

    These are just a few of the comments overheard on a recent day as two presumably hungry mortgage professionals met over lunch within earshot of our table at a local restaurant. Curiously, they both seemed to agree that these strategies were key to turning millennials into homeowners.

    The strategies dont seem out of line, really... unless you actually know some millennials and are in touch with how they act, who they are, what they like, what they want, and what they respond to. Theres an obvious grain of salt here, as were about to speak in pretty broad generalities about millennials. But, its clearly an important topic given the sheer number of them out there and the hope that at least some will transition from renting or living at mom and dads house to a place of their own.

    There are countless articles out there geared toward helping the real estate agent and mortgage professional reach the millennial market. Not surprisingly, many of them are focused on social media proficiency as a means for message delivery. But what about the message itself?

    The fact that specific messaging is largely not being tailored to this critical market is concerning. It further illustrates the disconnect between millennials and the real estate industry as a whole. Are millennials unrealistic in their expectations - in both thinking that the market will come to them when theyre ready or giving up the idea of homeownership altogether? Or, are real estate and mortgage professionals simply not approaching and talking to millennials in a way that makes sense to them?

    Its a combination of both, really, but for the sake of this article, were going to focus on the latter. Reaching buyers is all about knowing your target. Do you wonder why so many industry professionals are using such a traditional, old-school approach? We do, too.

    The avocado toast argument

    Australian real estate mogul Tim Gurner caused a major debate earlier this year when he went on the Australian news program 60 Minutes and famously told millennials to stop buying avocado toast if they wanted to become homeowners. "When I was trying to buy my first home, I wasnt buying smashed avocado for 19 and four coffees at 4 each," he said. "Were at a point now where the expectations of younger people are very, very high. They want to eat out every day, they want to travel to Europe every year.nbsp;The people that own homes today worked very, very hard for it, saved every dollar, did everything they could to get up the property investment ladder."

    Leaving some of the more negative generalizations and characterizations aside, millennials have, indeed, proven how much they value their leisure pursuits. That means that ordering a latte in a cafeacute; or avocado toast in a restaurant isnt so much about the drink or the meal as it is sitting in the cafeacute; or restaurant with a friend or loved one, enjoying the experience.

    Will millennials forgo the things - or, more appropriately, the experiences - they love to buy a house? Some will. For the rest, it may just be up to the real estate and mortgage folks to adjust their tactics in order to coax these potential buyers into the market.

    Do millennials even want to buy homes?

    This has been a matter of much debate. According to the 2017 homebuyer Insights Report from Bank of America, the answer is a resounding "Yes."

    "If theres one thing to take away from our report this year, its that forward-thinking millennials are buying homes - and theyre happy with their choice," the report said. "This growing group of millennials is seeing the value of getting into a home. In fact, nearly 80 percent who bought homes report that homeownership has had a positive long-term impact on their financial picture. Clearly, the millennial generation is coming of age and realizing it might not make sense to wait anymore to purchase their first home."

    But, what are they willing to give up to get there? Might you be able to convince a millennial that paying off their car and not trading it in for a new one, as suggested by one of the restaurant mortgage pros, is the smart move if a millennial wants to buy a home? Possibly. But there are two inherent problems with that idea tied to a lack of understanding of millennials in general:

    1. It assumes that a millennial has a car they can pay off, and not a lease, which is far more likely. "One-third of millennial car buyers chose a lease last year, which helped push auto lease volume to a record of 4.3 million and 31 percent of all new auto purchases, according to market research by," said the Dallas Morning News.

    2. It assumes that millennials will act in a way that is opposite their nature for the sake of becoming a homeowner. Yes, were back to coffee and avocado toast, but it also applies to new cars. "Younger buyers in particular are more likely to view cars as technology that needs to be continually upgraded," Jessica Caldwell, executive director of strategic analytics at told the Dallas Morning News.

    Mortgage options

    Of note is the fact that, during the overheard, hour-plus conversation between the two mortgage professionals, only FHA and conventional loans were discussed. So much of working with buyers today, and, especially millennials, is about being creative, which is why there are so many other loans out there worthy of investigation.

    In addition to FHA, which would allow millennials to put down just 3.5 with more lenient credit scores than many conventional loans, there are Fannie and Freddie loans out there that require just 3 down. There are also "lender-branded specialty mortgages" with a minimum of 3 down that have "strong appeal to millennials," said "Several lenders are offering loans with a 3 percent down payment requirement to offset the burden of saving for a down payment. For instance, Chases DreaMaker mortgage is directed at low-to-moderate income buyers, as well as those with less-than-perfect credit."

    Lennar also just introduced a new loan program through its subsidiary called the Eagle Home Mortgages Student Loan Debt Mortgage Program in which borrowers "can direct up to 3 of the purchase price to pay their student loans when they buy a new home from Lennar," according to the builders news >

    And 13,000 buys a lot of avocado toast and coffee. Maybe even a couple trips to Europe.

    Full Story >

    Taking A Tax Loss On Your Principal Residence

    Question. When my wife died several years ago, I sold the large house we were living in and bought a smaller house.. That purchase was at the top of the local real estate market. I have just purchased a retirement home and would like to sell my current property. However, after real estate commissions and sales expenses, I am facing a sizable loss -- and my accountant tells me this loss is not tax deductible. Can you suggest any solutions so that I do not lose my long-term investment?

    Answer. Your accountant is correct. Current tax law permits a tax loss deduction for investment property but not for a principal residence. Although it appears that some day in the foreseeable future Congress will provide similar tax >You do, however, have a few options.

    First, to the extent you can make projections, try to analyze the future marketability of your house. Will the house come back up in value, or will it continue to deteriorate? If you keep the house for a longer period of time, will you have to make a number of costly repairs and thus be throwing good money after bad? In other words, does it make sense to "take your loss and run?"

    Second, if you decide it makes sense not to sell now, rent the house out for a year or two. Abandon the house as your principal residence; pay taxes where your retirement home is located, get a new drivers license and new voter registration card at a different address. Let your friends and >A year or two from now, depending on your financial and personal needs, you can then sell the property. Since it will then be investment real estate, you may be able to deduct some of your tax loss on your income tax return although you should confirm the amount with your accountant.

    If you do not need the money -- or the tax loss -- and if the rental income from the house is worthwhile, you can continue to rent out the house.

    Third, once you have converted the property to that of an investment rather than your principal residence, you might want to consider swapping the house under the "like-kind" Starker exchange. Such an exchange would permit you to obtain alternative real estate, without currently having to pay tax on any profit. Obviously, however, if you have no gain, there is no need to consider a Starker exchange. The rules for such an exchange are complex, and have been discussed in earlier columns.

    Finally, if you have children, why not consider keeping the real estate until your death. Under current tax law, which may change in the current Congress your children will inherit the property at what is known as the "stepped-up" basis. Oversimplified, this means that the childrens tax basis is the value of the property at the date of your death -- and not your tax basis. Your tax advisors should be asked to analyze all of these various options.

    Your question also raised a very important issue facing many older homeowners-- and one that is often overlooked or forgotten. Many homeowners purchased their first home many years ago at low prices. Over the years -- especially in the l970s and l980s -- real estate appreciated rapidly. Many homeowners moved from one house to another, and took advantage of the roll-over. Now, when they want to sell their last house -- or purchase down in price as you are considering -- the tax issues become very important.

    Let us look at the following example. Assume that in 1970, you and your wife purchased your first house for 30,000. Over the years, you added 20,000 in improvements, and thus the basis for tax purposes purchase price plus improvements for you and your wife was 25,000 each. In 1987, you sold the house for 200,000, thus generating what you probably believed was a paper profit of 150,000.

    However, since your wife died before you sold the first house, your basis is increased by virtue of the "stepped up" basis. At the time of your wifes death, the property was worth 200,000. Under the tax laws, you inherited your wifes basis as of the date of her death; in our example, her basis was 100,000. Thus, for tax purposes, the basis of your first house when you sold it was 125,000 25,000 plus 100,000.

    Your house was sold for 200,000, and thus your profit was 75,000. But since you purchased your current house within two years from the time the first house was sold, you qualified for the roll-over, and this profit was used to reduce the basis of the Alexandria house. Accordingly, although you paid 300,000 for the new property, in reality its basis is 225,000.

    If you sell the house now for 220,000, even after paying real estate commissions and other expenses, your paper loss will not be as great as you think.

    However, this is tax talk; you are looking at an actual loss of 80,000, since you purchased the house at 300,000 and now can only sell it for 220,000. There are a lot of people who purchased real estate at the peak of the market, -- and despite significant increases in value -- many homeowners are still unfortunately under water.

    And the rollover has long been replaced by the up-to-250,000/500,000 exclusion of gain.
    Full Story >

    Ask the HOA Expert: Proper Funding Levels

    Question: Our HOA recently had a reserve study update which the board is evaluating to ensure that we are adequately funded. What is a proper funding level? I have heard numbers from "30 Funded" to "80 Funded".

    Answer: 100 Funded is the most fair to all members and should be the goal. For example, if you have a 30 year roof that costs 90,000 to replace, you should reserve 3,000/year to be 100 Funded. Reserving anything less will produce a lower level of funding that will have to be made up in the future by others that shouldnt have to pay it. Being 100 Funded all the time insures that all members pay their fair share.

    If you are currently, say, 40 funded, you should institute a plan to increase the level of funding to 100 over a period of years if possible. The board could also special assess to bring it up to 100 this year, although that might be a hard sell unless there is an urgent need, like that 30 year old roof is now 35 years old and leaking like a sieve. Sometimes special assessments are unavoidable because of inadequate funding in the past. But striving for 100 Funding today will eliminate the need for special assessments in the future.

    Question: Our governing documents have policies regarding tree cutting and clearing. From time to time, the board gets requests from lot owners asking permission to cut a tree because of fear that it will fall on the house. If there is no disease or damage, we deny such requests. It has been suggested recently that the HOA can be held liable for damage and injury from falling trees.

    Answer: The HOA is certainly liable for failing to maintain trees in the common area and should have a regular tree maintenance program to keep trees trimmed, healthy and safe. Trees located on private lots is another matter. If an owner maintains a tree is in danger of falling, it should either be obvious to a casual observer or be documented by an arborist. The board should make prudent decisions based on >There is also a fire hazard presented by trees that are closer that 30 feet to the structure, especially if they are highly flammable like pine trees or in areas prone to drought and wildfires. If an arborist believes they are a danger, the tree should be removed.

    For more innovative homeowner association management strategies, see
    Full Story >

    Copyright©2017 Realty Times®.All Rights Reserved

    International Buyers
    Luxury Rentals
    Miami Tourist Guide
    Sign up for our Newsletter
    Client Login

    Updated: Tuesday, October 24, 2017

    Selling: Half The Winning Real...
    Lets zero in on the family home to reveal room for improvement in ways this investment can b...

    California REALTORS Face Asses...
    Recently the directors of the California Association of REALTORSreg; CAR voted to place a 10...

    DIY Fall Decor Tricks...
    Who says you have to spend big bucks to give your home some fall flair“ All you need i...

    Copyright ©2017Realty Times®. All Rights Reserved