Buying Your Home

Answer: One of the unfortunate myths about relocation is that school-age children should not be moved until summer. Many families have undergone considerable inconvenience just to avoid a move while school is still in session.

However, since school is a primary source for making friends, a summertime move will place your child in unfamiliar surroundings at a time when making friends is at a minimum. When school opens, the child enters the first-day chaos as a stranger. The teacher, meanwhile, facing a new class, may not be able to identify the child's discomfort and need for special attention.

By making a move during the school year, the child moves from one social setting into another. Being the "new kid" makes him or her feel special, so the child generally receives special attention from other children and the teacher.

Moving has become a common aspect of the American way of life. Some families are old hands at relocating. Other families may decide to move this year for the first and perhaps the only time.

But whether a family is a veteran or a rookie in the moving process, one aspect not to be overlooked or left to chance is the effect which relocation has on children. When you change addresses, you will move many valuable possessions, but none will be as precious, or as vulnerable to the move, as your children. It's important to give them the special attention they deserve and need.

Talking to children about the move is a matter of top priority. Explain to each child, at his or her own level of understanding, why you are moving, what the new home will be like, and how each of them can contribute to the success of the family's relocation.

Encourage them to express whatever feelings they have on the subject. Accept their attitudes even if they are negative, and discuss with them your own feelings. Your own attitude, however, will play an important part in how your children respond to the move.

Answer submitted by Lori Lapka, GRI, LTG, BriarWood Realty Company

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Question: I'm thinking of buying a house and have heard that there are many important tax advantages in doing so. What does that mean?

Answer: It generally means gaining deductions and lowering your taxes while building long-term equity. So besides the simple pride of homeownership, it's the tax advantages that prompt many renters to take the plunge and buy a home. The tax advantages to owning a home could come in three stages:

1. When you own a home, the money you spend on home mortgage and real estate taxes may be deductible from your taxable income if you itemize deductions. The savings come in income taxes that you don't have to pay.

For example, let's say you buy a home and your mortgage payment is $1,200 a month including taxes. In the early years of a mortgage, most of the payment is interest, so almost all of that $1,200 would be deductible when you itemize deductions on your income tax return.

When you multiply $1,200 a month times 12 months, you get $14,400 much of which could be deductible from your taxable income. If you are paying income tax at a rate of 28 percent, a $14,400 deduction means a tax savings of just over $4,000 or more than $300 a month.

It's easy to see why people decide to buy. In this example, not only do you get a place to live, you get a tax break of $4,000 and all of the appreciation as your home grows in value.

2. Homeownership may offer some very important long-term tax advantages. Generally, when you invest in something and then sell it, you are required to pay taxes on the profit you reaped from your investment. That's true of houses, too.

You are responsible for paying taxes on any profit you gain by selling a home. But under the current tax code, you may defer those taxes as long as you buy a home of equal or greater value. People can and do buy and sell home after home, making a profit on each one and deferring the taxes each time.

3. When the time comes to buy a smaller home or not buy a home at all, there may be a third tax break. Since that change usually comes when a homeowner is a senior citizen, the federal government has established a tax exemption to make things easier for older homeowners.

Senior citizens who meet certain criteria may receive an exemption on the profits on the sale of their home of up to $125,000. That's a big savings in taxes that don't have to be paid... and makes a nice nest egg for retirement.

These three benefits--the deduction from taxable income, the deferral of tax on profits when you sell a home, and the exemption for senior citizens--are tax advantages that make homeownership an important part of your financial planning.

Answer submitted by Lori Lapka, GRI, LTG, BriarWood Realty Company

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Question: My wife and I are planning to purchase a retirement home in Florida later this year. We would like to find a REALTOR® who can send us some preliminary information and represent us in buying our new home. How can we find someone reliable to help?

Answer: Your local REALTOR® will be a terrific source of assistance in this area. Local REALTORS® can help you find other dependable REALTORS® to work with in most areas the country. We can help you determine which REALTOR® will give you the best service based on your individual needs. Having a good Agent to work with in your new area will save you lots of time and expense.

Answer submitted by Brian Huggler, ABR, CRS, GRI, Tomie Raines, Inc.

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Question: What's the real difference between a new home and an old one?

Answer: While each offers its own style and charm, the difference usually boils down to two things: (1) how the home fits into the Buyer's lifestyle and (2) the condition of the property.

Homes that are 10 years old or less are generally better insulated or have dual-glazed windows or thermal panes which mean lower heating and cooling bills. And, in today's rising energy cost environment, those costs can be quite significant. Although there are some exceptions, homes that have been built with all-electric systems are going to have higher utility bills.

Homes that range between 15 and 20 years old may be in need of new water pipes, especially if the old ones were galvanized and if a water softener was used. Water softeners and galvanized pipe can be deadly, and after 15-20 years, replumbing is usually required. Have a plumber or general contractor inspect the pipes. Needless to say, it can be expensive to replumb an entire system.

Check the built-in fixtures and appliances for any signs of damage. Flush toilets, test all the water taps, put plugs in all the electrical sockets, open and shut the windows, and try all of the lights. A window that will not open may be a sign of a more significant problem such as a wall that has shifted, or worse yet, a problem with the foundation. It is also a good idea to ask the Seller for copies of past utility bills. Examine them for some insight into what costs you can expect from the heating and air conditioning systems.

Although newer homes may be free of significant physical or structural problems, there are other things to consider. Generally, room sizes and yard sizes tend to be smaller in some new homes. While, on the other hand, they usually offer the benefit of new technology in building and designing, many new homes also have more windows and light incorporated into their design allowing for a more open feel.

Answer submitted by Robert E. Hubbell, Coldwell Banker Hubbell Real Estate

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Question: This home seems to be in very good condition, and the Sellers have provided us with a disclosure statement indicating they have no major problems with the property. Do you really think it is necessary to spend the money for the property inspection?

Answer: Absolutely! Having a property inspection is your way to verify through an independent, unbiased professional that there are no concealed defects. Many times there may be problems with the property that the Seller is unaware of. The typical inspection charge of $150 to $200 is a small amount to pay for additional assurance that the property you are purchasing will not require major repairs after you move in.