Graduation season is right around the corner. Whether you have a child graduating college, high, middle, or elementary school, it’s always challenging to figure out what the right gift should be. Over the next several years, I’ll have at least one of my kids graduating some level of school. This year, my son is graduating 5th grade, then next year my middle daughter will graduate 8th grade, and the year after that my oldest will be graduating high school. If you are a parent, you may debate about whether to do a party, give a gift, or perhaps some combination of both. Here are Your Smart Money Moves for budget-friendly graduation gifts. First of all, let’s make sure you don’t get too carried away when your child graduates elementary school and completes 5th grade. Remember, you’ll have an eighth grade graduation coming up soon with high school quickly following. At this graduation level, here are three simple ideas on what you can do for your child. Cell Phone – In…Continue reading
It seems like every mall or suburb strip outlet you go into today has virtually all the same stores. What would a mall be without a GAP or an Abercrombie & Fitch? What amazes me the most is how we as parents can get caught up in making sure that our children have the very best in brand names without thinking about the price or whether it is affordable in our monthly budget.Continue reading
The National Association of Home Builders has been a leading source of information regarding the $7,500 federal tax credit and it’s affect on stimulating the U.S. housing industry. In a recent update on their website they discuss ways that you could possibly benefit from the tax credit prior to the purchase of a new home.
Here is the latest update from NAHB regarding this possible tax loop that may benefit home buyers:
First-time home buyers can accelerate the receipt of the $7,500 from their tax credit and even apply it toward a downpayment, according to NAHB tax analyst Robert Dietz.
NAHB’s Web site explaining the tax credit — www.federalhousingtaxcredit.com — has been inundated by home builders and prospective buyers seeking information on the new benefit.
One of the most commonly asked questions since the credit was enacted concerns how it can be used for a downpayment, and new questions and answers related to this issue recently have been added to the Web site. (See questions 19 to 21.)
First-time home buyers (defined as those who have not owned a principal residence for three years) should be aware of several mechanisms that can narrow or close the gap between the time they purchase their home and the time they take the deduction on their income tax return, said Dietz.
NAHB successfully pushed for a rule that allows qualified home buyers making a home purchase in 2009 before the July 1 cut-off date to claim the $7,500 credit on their 2008 tax return — in effect, one year early. Also, home buyers who purchase a home after filing their 2008 tax return with the IRS in 2009 may file an amended tax return that includes the credit.
As a result, the qualifying home buyer can significantly reduce the time it takes to receive the cash benefit of the tax credit.
More fundamentally, strategic home buyers have a more effective option in their hands. Prospective home buyers, who are certain they qualify for the credit based on the income limits and the first-time buyer test, can adjust their income tax withholding today through their employer.
IRS Form W-4, which is typically submitted by most workers when beginning a new job, allows taxpayers to adjust the amount of automatic income tax withholding in anticipation of certain tax credits. The form states, “You can take projected tax credits into account in figuring your allowable number of withholding allowances.”
Home buyers who expect to claim the tax credit can reduce their withholding, thereby increasing their take-home pay (net of income tax) and allowing them to begin to claim the expected tax credit for use as a downpayment.
This is done by adding the expected credit amount to line 5 or reducing line 6 (additional withholding) of the Deductions and Adjustments Worksheet on the W-4 and recalculating their income tax withholding. Similar adjustments can be done by home buyers making quarterly estimated tax payments.
Home buyers must be careful to understand the rules for both withholding and the tax credit before submitting a revised W-4 form to their employer. In particular, buyers should consult IRS Publication 919, or check with a tax practitioner, to determine how much to adjust their withholding.
The 2008 version of the IRS publication allows taxpayers to enter the anticipated credit amount on line 9 of worksheet 8, with “other credits.” Buyers must be careful not to reduce their withholding by more than the amount of their expected tax credit, or tax penalties may apply when they file their income tax return.
NAHB is also studying other tax and housing finance regulatory recommendations to ensure that the tax credit program is an effective stimulus for the housing market and the economy.
Buying a home means that you have to get into the home to see it, right? Most buyers can not make a decision to buy a home until they have a deep understanding about what they are buying, the area they are buying in and what the home will mean to them. This means seeing homes with their agent, through open houses or via lock boxes, or having the listing agent let them into the home.
However, most buyers are confused about what this education process will cost them when they start to work with an agent. Real estate commission is almost always paid by the seller. The buyer usually pays nothing. For a seller to be in the MLS, the system where agents find homes and buyers find homes to see and buy, the seller must offer the buyer’s agent a commission. This is the caveat to be in the MLS because the MLS is a co-operative service to notify agents of houses that are on the market. When you, as a buyer, look online at any website, you are looking at the MLS. You are just viewing a watered down version with will less information on the listing profile and fewer search fields than what an agent will see,
There are some exceptions to the fact that almost all sellers pay the commission – please be aware:
Exception 1 – You have signed a buyer’s agency with an agent and the seller is only offer say 2% commission to the buyer’s agent (this could be any number) and your agreement with your agent states that no matter what, the commission that they get 3%. You will be expected to cover the gap and pay the extra 1% commission.
Exception 2 – You buy a for-sale-by-owner. Not all for-sale-by-owners will honor a buyer’s agent commission. Normally, sellers will announce the willingness to pay a buyer’s agent commission by stating, verbally or through a sign rider, that “agents are protected”.
Those are the only two exceptions that I can think of?
The Real Estate Law Protects Your Interest
So, keeping the two exceptions in mind, let’s talk about what the real estate law says about your rights. You see the real estate law is written to protect the person that pays the commission to any agent. Since the seller is paying the commission, you did not get the right to have representation. I know, you are saying now, “No, my agent was by my side the whole time.” Well, they may have been by your side, but they were representing the seller, UNLESS, you signed a document in writing that stated that they represented you with confidentiality. This is called a buyer’s brokerage engagement in most states. And since this buyer representation is FREE in most cases, it is the best deal in real estate.
So, the bottom line is, see houses for free, be protected by hiring an agent in writing, and if you are in Atlanta, take part in the additional bonus of having an expert represent you in writing an offer, negotiating the contract and get cash at closing too! Duffy Realty offers a Buyer Cash Bonus of at least $500.00 up to HALF the BUYER’S AGENT COMMISSION to be paid at closing. You will get all of our tools, an expert agent, a clear understanding of your rights and the seller’s rights and like I said above, a BUYER CASH BONUS check 5 days after closing and all at NO COST to the buyer client.
For more details, go to www.DuffyRealtyofAtlanta.com or call 678-892-1186.
Looking for a listing service that costs less than what you have heard agents quote you lately? Of course you are. Your Mama didn’t raise no dummy.
Maybe you have heard Rhonda Duffy on the radio stating that she sold 819 listings in 2007. Well that is just half the story. She did it in ½ of the time of other agents as reported by the FMLS and MLS. And, 2007 was not the only record breaking year. Rhonda Duffy seems to sell houses no matter what year it is, nor what the media is squawking about or what the political rhetoric is…
How does she do it? Magic of course. No, not really. That is what the other agents would want you to believe they have. After all, why else would you pay high commissions that you regret later or even worse that stop you from being able to accept offers from buyers because the heavy burden it places on your ability to make a deal. When your first 6 or 7% of the offer has to be paid out off the top to your traditional agent (a.k.a. your new partner) who you haven’t seen since your listing appointment, it makes it difficult to make offers like this work.
Okay, listen up. The truth is that if you add a huge commission structure to your house selling process, you will be doomed. Ask full-priced agents, are you getting offers on your clients’ properties? Yes, they will say. Then follow up with do they all close? No, they will say. Then, promptly ask them what is the margin that keeps the sale from happening? They will look at you kind of puzzled and you then say, “you know the difference between the offer price and the amount that the seller wanted”. Of course, they have not thought of this because frankly they have not thought of their sales strategy so you may have to do some specifics with them. Anyway, 20 minutes later, after you have helped them work this all out in their head, you will come up with the answer and that is that deals fall apart when the parties are separated by just 2%.
Yes, that is a small number. The gap is just 2%, but let’s put this in perspective. The buyer nailed the number so low, and the seller made concessions, but when all the dust settled, they were still apart about 2%. Voila, we have the classic buyer’s market. A buyer’s market means that buyers want a good deal and if you are not willing to give it to them, well they just move on. 2% on a $400,000 home is $8,000. 2% on a $2 million dollar home is $40,000. Everything is relevant to that buyer and seller.
That is where the brilliant Rhonda Duffy comes in… her listing program costs less than ½ of 1% on the average home. The more your home costs, then the lower the percentage of the overall cost would be because of the $500 fixed cost up front. Now, if you take the 3% commission that you will be quoted by a listing agent and subtract the ½ of 1% commission that Duffy charges, what you are left with is a huge 2.5% of wiggle room, savings, profit or whatever you want to call it. And now what to do with it. The price savings that this powerful model gives you, subsidizes the ability to offer more commission to buyer’s agents to attract more of them, quicker, to provide more concessions to a buyer to make a sale more probable or just the opportunity to put more money in your pocket.
I don’t have enough room here to tell you EVERYTHING about this program, but I will tell you, if you don’t go to Rhonda’s website, you are missing the selling boat.
I left my selling transaction empowered, smart and I know one thing for sure, I will NEVER sell or buy real estate another way. I know that you are saying never say never, but I promise, I will NEVER buy or sell real estate another way.
In the 2 transactions that I did with Rhonda and her team, I pocketed over $40,000 versus what another agent was going to charge me to list my house and not give me after I purchased. I am going to put that money down on a plane or a boat. My wife has not given me permission yet, so keep your fingers crossed for me!
– Jonas Alexander – Loyal Duffy Client
Rhonda Duffy is my hero!
What I have learned from the many Sellers who have sold their home in the by owner fashion is that they want the opportunity to do so. Most Sellers share many of these reasons as to why they love the opportunities afforded to them by the for sale by owner model:
1. They want the opportunity to show their own home and tell their story to every person who will listen.
2. They want to market their home however they want without the penalty of having to pay an agent when a neighbor’s mother or a friend from church buys the home.
3. They want to meet and know the buyer and the buyer’s family.
4. They want to be able to accept the offer that they want to accept without having the pressure of an agent telling them to take the offer because they have commission breath and ulterior motives.
5. They want the home to be sold solely on their terms.
6. They want to avoid a listing agent’s commission and/or a buyer’s agent commission that they think are too much.
7. They don’t trust agents, especially when it comes to negotiating on the Seller’s terms instead of their own or conveying the full message of conversations that they have had with fellow agents.
What most Sellers who have this mindset do tell me is that they want all of these conditions, plus, they want exposure. They want the things that only an agent can give them, like listing the property, access to Internet websites that are fed by the MLS, and help on the contract, but all on their terms.
Thank goodness there is a shift in the way that real estate is now sold. Now, Sellers have the option of something in between for sale by owner where they have no exposure and no help and the traditional agent system where they have to follow all of the rules of the agent and their brokerage.
If you are interested in how the real estate world has changed, and the gap between for sale by owner and traditional agency has been forever bridged, look at the best example that there is…