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Buying a Home With Unpaid Real Estate Taxes Is Risky


If you’ve been looking for a home but find yourself frustrated by high prices or the lack of homes on the market, you may find yourself lingering over ads for properties sold at a tax-sale auction. While all real estate transactions come with a “buyer beware” label, the warning sign should be larger when it comes to purchasing a property at a tax sale.

Tax Deed Sale Basics

Homeowners who fall behind on their property taxes typically are sent notices about the unpaid bill from their local government. The rules about how unpaid taxes are handled vary from one jurisdiction to another, but generally after a certain period of time these homeowners are charged interest on their unpaid taxes. The amount of interest charged is set by each state and then charged by the county government and can range as high as 12% to 24%.

If the property taxes go unpaid for a long time, such as a year or more, the local government has the right to “sell the taxes.” Investors are enticed to buy these tax liens, which are typically sold at an auction, because of the high return on investment.

When you buy the tax lien, you don’t immediately become the owner of the home. Instead, the homeowner has another opportunity to pay back their taxes. If the bill is paid, then you get your investment back and you also receive the interest owed on the taxes.

If the owners cannot or will not pay their tax bill, you eventually become the owner of the property for the price you paid for their tax bill.

While this may sound like a great deal—since you will get your money back and you will either receive interest on your investment or own a home—there are plenty of pitfalls to buying a home with a tax lien.

Not for the Novice Investor

The rules are complicated and different in every state, but in nearly every case you should expect to wait months or even years before you can take possession of the property, if ever. The owners could come up with the cash to pay their taxes, but even if they don’t, it can take a long time before the government gives up on getting the back-taxes paid and before a title company will issue title insurance.

As with any investment it is extremely important to know what you are buying. While you won’t be able to get into the home or have a home inspection, you should at least visit the property and make sure there’s a home on the land and that it hasn’t been destroyed by a fire or a storm. Research the local property records to check whether the tax bill was sent. Governments do make mistakes, and if it turns out the taxes were paid, you will eventually get your money back but you probably won’t earn any interest on it.

Remember that you will need money upfront to purchase the tax lien and that you need to be ready to compete against other bidders. Your cash could be tied up for months or years to allow the property owners a chance to keep their home, so be sure you are able to part with the investment for that much time.

If your main interest is finding a home to live in within a few months, a tax sale isn’t likely to achieve your goal. If you’re looking for an investment, be aware that you need to follow specific rules; and, be ready to take the risk that you will end up owning a property that could require significant repairs before it’s habitable.



Allergy-Free Sleep in the Bedroom

By Dave Donovan

For years we’ve known how important sleep is to our health, but when you suffer from allergies, sleeping can be a frustrating and less-than-refreshing experience. From everyday dust to more serious problems like bed bugs, there are dozens of irritations that affect the quality and soundness of one’s sleep. Luckily, most of these issues can be eliminated or prevented by following a few easy steps.

Step 1: Check the Bedroom’s Humidity

Humid air is a breeding ground for mold spores and dust mites, so if your bedroom’s humidity level is greater than 50 percent, then you need to do something about it. Using the air conditioner or a dehumidifier throughout the summer months will remove a lot of the excess moisture from the air and help you sleep better at night because dust mites and mold spores won’t be as active in the low-humidity environment.

Step 2: Use Bed Bug-Proof Bedding Encasements

Bed bugs and mites can quickly grow from a pesky nuisance to an all-out infestation and this will wreck havoc on you if you're an allergy sufferer. In addition, you’ll also find yourself suffering multitudes of nightly bites which produce red, itchy welts. To reduce the chances of bed bugs and other critters from taking up residence in your bedroom, cover your mattress and boxspring in bed bug-proof encasements and make sure they are sealed completely. For even more protection, bug-proof encasements are also available for pillows, comforters and other bedding products.

Step 3: Install Vent Filters

Changing the filter in your furnace on a regular basis is an important step in keeping your bedroom allergen-free, but in some cases, this isn't enough. Individual filters are available that are designed for installation over each vent. By adding this additional layer of filtration, you’ll stop even more allergens from entering your living space.

Step 4: Wash Your Bedding Often

If you suffer from allergies, then you should wash your bedding in very hot water every 10 days. The water needs to be between 120 and 140 degrees to kill any mites and/or allergens. You can also purchase specially-made detergents designed to eliminate allergens regardless of the water temperature if you’re looking to save money on your hot water usage.

Step 5: Get Rid of the Bedroom Carpet

The bedroom’s wall-to-wall carpet provides great hiding places for mites, excess dust and bed bugs. Get rid of it and install hard surface flooring instead and you’ll breathe much easier. You can use some throw rugs to help soften up the space if you prefer, but if you do, treat the rugs with an anti-dust mite powder or spray.

Step 6: Vacuum the Bedroom Frequently

Having a hard surface floor in the bedroom will make it easier to clean and vacuum, so do this often to help prevent the formation of dust bunnies. If you don’t already own one, you should consider upgrading your vacuum to one that features a HEPA filtration system because it not only traps the allergens but also filters the air as it exits the vacuum.

Step 7: Get Rid of Plush Bedroom Furniture

Bed bugs and dust mites love hiding in the crevices of plush furniture, so don’t keep any cushioned loungers or other items of furniture in your bedroom. If you must have additional furniture in your bedroom besides your bed, choose only leather, vinyl, wood or rattan furniture because bed bugs cannot live on the surface of these materials.

Step 8: Remove Dust Catchers From the Room

Bedrooms surprisingly have dozens of items that can collect and trap dust, from fabric drapes to books to stuffed animals. Get rid of everything that collects dust so your bedroom will be easier to clean and less likely to house dust mites. Instead of drapes, use vinyl vertical blinds or shades, but be sure you dust or vacuum them often as they can also collect dust if not cleaned on a regular basis.

Step 9: Place a HEPA Air Cleaner in the Room

Placing a HEPA air cleaner in your room will help remove a great amount of dust and allergens from the air. Choose one that suits the size of your bedroom and run it according to the manufacturer’s directions. You should also clean the appliance’s filter as recommended by the manufacturer to get the best results.

Suffering from allergies will cause you to have to make several lifestyle changes if you want to keep your reactions to a minimum. Since we spend a third of our life in our bedroom, this is one of the most important areas you need to keep allergen-free. Following these steps will help reduce the levels of dust or allergens in your bedroom so you can sleep easier and more soundly every night.



The Pros and Cons of Adding a Pool to Your Home

In general, building a pool is not the best way to add value to your home. You’re better off making physical improvements to your actual house instead of adding a pool to your yard.

However, a pool can add value to your home in some cases:

§  If you live in a higher-end neighborhood and most of your neighbors have pools. In fact, not having a pool might make your home harder to sell.

§  If you live in a warm climate, such as Florida or Hawaii.

§  Your lot is big enough to accommodate a pool and still have some yard left over for play or gardening.

Still, that’s no guarantee you’ll get a return on your investment. At most, your home’s value might increase 7% if all circumstances are right when it comes time to sell. Those circumstances include the points made above, plus:

§  The style of the pool. Does it fit the neighborhood?

§  The condition of the pool. Is it well-maintained?

§  Age of the pool. If you put a pool in today and sell in 20 years, you probably won’t recoup your costs, especially if the pool needs updating.

§  You can attract the right buyer. Couples with very young children may shy away from pools because of safety issues, but an older childless couple may fall in love with it.

But only you, the homeowner, can determine the true return on investment. A pool can add value to your quality of life and enhance the enjoyment of your home. You can’t put a price tag on that.

But we can put a price tag on how much a pool costs to build and maintain.

The Cost to Build a Pool

The average cost in the U.S. to install, equip, and fill a 600-sq.-ft. concrete pool starts at $30,000.

Add in details like safety fences (most states require them), waterfalls, lighting, landscaping, and perhaps a spa, and you’re easily looking at totals approaching $100,000.

Costs also depend on the type of pool you choose.

Gunite is the most popular in-ground pool. Gunite is a mixture of cement and sand, which can be poured into almost any shape. It has replaced concrete pools as the sought-after standard.

Fiberglass shells and those with vinyl liners fall on the lower end of the budget scale, but the liners typically need replacing every 10 or so years. Changing the liner requires draining the pool and replacing the edging (called coping), so over time, costs add up. Most homebuyers will insist that you replace a vinyl liner, even if it’s only a few years old.

Filtration and Heating

The filtration pump is the biggest energy hog in a pool system, so you want to get the most efficient pump possible. The good news here is that new, variable-speed pumps use up to 80% less energy than old single-speed pumps, cutting operating expenses dramatically.

At about $500, these cost more up front, but some local utilities offer rebates through participating pool dealers. You can further cut energy costs by setting the pump to run at non-peak times, when rates for electricity are lower.

If you’re planning to heat your pool, gas heaters are the least expensive to purchase and install, but they typically have the highest operation and maintenance costs. Many pool owners opt instead for electric heat pumps, which extract heat from the surrounding air and transfer it to the water. Heat pumps take longer than gas to warm the pool, but they’re more energy-efficient, costing $200 to $400 less to operate per swimming season.

Regardless of heating system, covering the pool with a solar blanket to trap heat and reduce evaporation will further lower operating costs.

Maintenance Expenses

All pools require that the water be balanced for proper pH, alkalinity, and calcium levels. They also need sanitizing to control bacteria and germs, which is where chlorine has traditionally entered the picture.

These days you have a variety of options, including systems that use bromine, salt, ozone, ionizers, or other chemical compounds that can be less irritating to skin. Chlorine remains the most popular because the upfront costs are reasonable, and you don’t have to be as rigid about checking the levels on a set schedule. But as far as your wallet is concerned, they all even out in the end.

In a seasonal swimming climate, budget about $600 annually for maintenance if you shoulder the chemical balancing and cleaning yourself; in a year-round climate, it’s more like $15 to $25 per week.

To save yourself the task of once-a-week vacuuming, you can buy a robotic cleaning system for between $500 and $800 that will do the job for you. In locations where the pool must be opened and closed for the season, add another $500 each time for a pro to handle this task.

Insurance and Taxes

A basic homeowners insurance policy typically covers a pool structure without requiring a separate rider, but you should increase your liability from the standard amount.

It costs about $30 a year to bump coverage from $100,000 to $500,000. Many underwriters require you to fence in the pool so children can’t wander in unsupervised.

In some areas, adding a pool may increase your annual property taxes, but it won’t necessarily add to your home’s selling price. For that reason, try to keep your total building cost between 10% and 15% of what you paid for your house, lest you invest too much in an amenity that won’t pay you back.



How a Short Sale Can Impact Your Credit Score

While the United States housing market improved in 2013, at the end of the year 19% of homeowners with a mortgage owed more on their mortgage than the value of their home.

For homeowners with no plans to move and who can comfortably afford their mortgage payments, being underwater certainly can be frustrating. However, those homeowners have the option of waiting until the combination of rising home values and their continued loan repayment brings them back “above water.”

Homeowners who are struggling financially and can’t make their payments or who must relocate for employment face a bigger issue if they’re underwater on their home loan because they cannot sell their home for a profit and move. Some of these homeowners can qualify for a government refinance program or a loan modification from their lender, but others face a choice between letting the mortgage lender take their home in a foreclosure and negotiating a short sale.

A short sale simply refers to the situation when a borrower asks the lender to accept a loan repayment for less than the full amount. The amount offered depends on the sales price negotiated between the lender, the seller and a buyer. You’ll have to provide proof of a hardship such as a change in your finances that makes the payment unaffordable or mandatory job relocation.

If you’re able to get your lender to agree to a short sale, you may or may not be responsible in the future for the gap between the balance you owe and the amount actually repaid. This depends on the state where you live and your lender’s decision about seeking recourse.

Short Sales and Your Credit

Many homeowners prefer a short sale to a foreclosure because they believe there’s less of a stigma attached to a short sale and that it won’t necessarily damage their credit as much. However, both a foreclosure and a short sale can lower your credit score and will stay on your credit report for seven years. Over time, though, you can improve your credit score through credit rebuilding techniques such as paying all your bills on time, reducing your debt, and, if necessary getting a secured credit card and making regular payments.

The impact of a short sale on your credit depends on several factors, including the way your lender reports the short sale to the credit bureaus. Most lenders will use the term “settled” for a short sale, which indicates that less than the full debt was repaid. If you can negotiate with your lender to use the word “paid” your credit won’t be as badly damaged, but lenders rarely agree to that.

Your credit score could drop by anywhere from 85 to 200 points depending on whether you have been paying your mortgage on time and your previous credit score. If, for example, you had good credit of 700 or above, your score might drop even more than someone who already had a low credit score of 620 or so because of a short sale is an indication of potential future defaults on other credit, especially if the borrower with low score had been making on-time mortgage payments. If you had months of non-payment, partial payments or late payments on your mortgage, your credit score will also be lower because of the combination of the short sale and a bad mortgage history.

In spite of the impact on your credit, a short sale may be the best option if you can’t stay in your home because you can move on from your current situation and begin to rebuild your credit for the future.



Home Inspection: DIY or Leave It for the Pros


You found the perfect new place and want to sign on all those dotted lines, but are you sure that there aren’t any hidden issues? Is the structure sound? What about the plumbing, wiring and the exterior?

The best way to discover any problems is to hire an expert to conduct a home inspectionbefore you sign any contracts, but some aspects of the inspection you may be able to do yourself.

You may not know city building codes—for that, you’ll need a professional. But with some homework you may be able to inspect some areas yourself, saving a home inspector time and yourself some money.

Internal Home Inspection

Structural: A home inspector will be able to tell you whether the property was built on a slab or raised foundation. You may need to consult a foundation engineer to ensure the foundation remained stable.

Electrical: You don’t need an expert to spend time (and your money) flipping switches to make sure electrical fixtures work, or checking to ensure outlets have undamaged covers. You should bring in an expert when it comes to reviewing the wiring, grounding, circuit breakers, exhaust and ceiling fans and receptacles.

Roof and attic: You should be able to check whether the roof is draining correctly, in addition to checking the attic air vents. You may need a professional to determine the condition of the shingles or roofing material.

Pests: Signs of pests can be difficult to spot, especially if they are in the walls. You will probably want an expert to give a once-over here.

Paint: Lead-based paint has been banned since 1978, but not all homes measure up, especially older ones. You may need to hire an expert here, especially if you have young children.

Plumbing: You can check whether all the showers, sinks, toilets and faucets are in working order, though you might want a plumber to advise you about the condition of the pipes.

Doors and windows: You can check whether the locks on the external doors work and if all doors are aligned properly. You should also be able to tell whether windows open and close properly and if they have screens and bars where necessary.

Other components: You can test the heating system, air conditioning and sprinklers to see if they work. You will likely need the assessment of an expert to see if there are any cracks or other issues with duct work, a chimney, furnace or fireplace.

External Home Inspections

Gutters: You can see if the gutters are damaged and whether they drain properly.

Vegetation: You can determine quickly if the sprinklers work and the grass seems healthy, but you might consider hiring an arborist to check tree health on a wooded property.

Drainage: You can check whether water flows into the house from the yard and if the plants are at least 18 inches from the outside walls (to avoid trapped moisture).

Gas and asbestos: An expert should look for dangerous gases, such as radon, methane or formaldehyde, and whether the building material contains asbestos.

This article is updated from an earlier version written by Ben Apple.



How to Buy a Home After Bankruptcy


Declaring Chapter 7 or Chapter 13 bankruptcy is often devastating and can turn your home buying plans upside down.

Going into bankruptcy shuts down your ability to borrow money or use a credit card, severely lowering your credit score. It will take some time to build back enough credit to apply for a new credit card or to take out a mortgage on a home. However, with proper preparation, patience and financial planning, you might be able to purchase a home sooner than expected.

Discharge and Organize

First things first: The bankruptcy must be discharged. If you are still in the process, or if you are still in credit counseling or any other program that takes over your finances, no mortgage lender will speak to you.

Once your bankruptcy is discharged, organize and scrutinize your credit report. If there are debts that have been paid back but still appear on your report, contact the credit agency and have them corrected. While you’re at it, check for other mistakes on your credit report. You are entitled to one free credit report from each of the big three credit rating agencies each year—Equifax, Experian and TransUnion. If there is an error, dispute it online via the particular credit agency’s website.

Use Secured Credit Cards and Installment Loans

The fastest way to start rebuilding your credit score after a bankruptcy is to prove to creditors and other lenders that you can be trusted to pay back the money you owe them. You can do this two ways: secured credit cards and installment loans.

A secured credit card gives you credit limited to the amount you have on deposit with the issuing bank. So, if you have $20 to $500 to place in an account with the issuing bank, then the bank will limit your credit each month to the amount of that deposit.

An installment loan is simply one where you make installment payments each month. It can be a personal loan, car loan or student loan. If you get an installment loan, then you only need to do one thing: make your monthly payments on time.

More Tips to Remember While Building Credit

§  Use only a small portion of your credit. Don’t max out your credit cards and don’t apply for too much credit at one time.

§  Move slowly and build up your credit with on-time or even early payments. When possible, pay back more than the monthly minimum.

§  Pay all your bills on time and save money.

§  Stay at the same job for a good length of time.

§  Remove any outstanding tax liens.


Wait at Least Two Years

Here’s where you will need patience: You should wait at least 24 months after your bankruptcy is discharged to apply for a mortgage. You may be able to get a mortgage sooner but the terms, like interest rates, won’t be as attractive as they would be if you waited two years. Since you might be paying that mortgage interest for up to 30 years, you will save money if you wait long enough after the discharge to get a good interest rate.

Finally Applying For a Mortgage

After the two-year period, make sure you are fully prepared to apply for a loan. Your lender will want you to meet certain criteria before agreeing to lend you money: A good debt-to-income ratio, stability and time on the job. Money in the bank and no bounced checks help tremendously, of course. Any retirement plans or 401(k) assets makes your credit look good as well.

And remember, a big down payment carries a lot of weight. Keep that in mind during the two-year waiting period and save as much as you can.



Buyer’s Perspective: What to Look For at an Open House

As with any big purchase, buying a home should be carefully planned and well thought out before any paperwork is signed. As a buyer, you should use an open house as an opportunity to ask a REALTOR® questions and imagine how the house you’re walking through could work as a home for you. You want to learn and know as much as you can about the house so you can make an informed decision when it’s time to buy.

Here are four things to bring to an open house:

§  Tape measure

§  Smartphone/Camera

§  Notebook

§  Folder to organize spec sheets and flyers


During the Open House

When you attend an open house, start by examining the neighborhood. Check the overall condition of the houses around the open house – pay attention to upkeep in the surrounding area. In addition to checking out the area,  keep an eye out for any potential maintenance issues on the exterior of the open house including peeling paint, cracks, or missing roof shingles/tiles.

Remember that open houses are designed for the home to look great. Keep a critical eye as you enter the house and walk from room to room. Look for telltale signs of damage or poor construction including:

§  Uneven floors

§  Water stains on walls, floors, ceilings (especially in kitchen, baths and basement)

§  Mold

§  Cracks in the wall or ceilings

§  Musty smell

§  Condition of the roof

Look out all the windows and check out the view, because changing the view is something you can’t easily fix. Don’t be afraid to open cabinets and drawers. Examine storage areas and closets and consider if the storage is adequate for you and your family. Feel free to turn on the water in the kitchen and bathrooms to make sure everything is running smoothly.

Try to look beyond any furnishings and imagine yourself in the bare bones of the home. Many homes have been staged for viewing and appear to be in tip-top shape; it’s best if you can avoid being dazzled by furniture that will be removed before you move in.

Take notes, pictures and video as you move throughout the house. (Make sure you ask before you whip out a camera –– politeness still counts.) Documenting your open house tour will serve two purposes: 1) Provide a record of issues that might help you negotiate a better deal, and 2) Help refresh your memory when you are making your decision about which house to buy.

Consider asking these questions:

§  When was the house built? (Houses built pre-1978 used lead paint.)

§  What renovations were made and when?

§  When was the home listed? (The longer it’s been on the market, the more likely it is to be overpriced.)

§  If you have kids, ask about the local school district

Asking questions is key, but you should keep a bit of a poker face – in a competitive market, you want to keep your thoughts to yourself until it’s actually time to negotiate a deal. Keep your ears open for what other folks who walk through the home are saying. They may note things about the home or neighborhood that you hadn’t yet noticed.

After the Open House

If you are interested in a house you just viewed, set up an appointment to go back. This is one of the most important things you can do when you are shopping for a home. Give yourself some time to think things over and re-examine the pictures that you took.

Above all, trust your gut. If something doesn’t feel right, don’t let the beauty of a perfectly staged home sway you into making a decision that isn’t right for you.



What Is The  Best Insulation For My Garage

Though often overlooked, your garage is one of the most important rooms in the house. It’s also one of the largest. It gets used several times everyday. It acts as a main storage unit. Plus, if you have an attached addition, it probably becomes your most accessible entryway, which makes your garage door more like your front door. However, since this room is often considered an outbuilding (even when it’s attached) it tends to be neglected. Usually these spaces are not properly sealed, hazard-proofed, and typically remain uninsulated, making them inefficient and possibly dangerous.

Why Garage Insulation?

What’s the point of insulating every nook and cranny around the house just to let air seep in and out of the garage, especially since these spaces are known for fluctuating temperatures: they’re steamy in the summer and freezing in the winter? So whether the area is small or large, and whether you use it a lot or not, it’s vital to install garage insulation. It helps to prohibit air seepage, heat transfer, health threats, and most importantly, it saves on unnecessary energy costs. You may even spend more time out there once the climate has become better regulated due to proper insulating.

Where Does It Go?

If garage insulation is just installed in the one wall edging your home’s interior, you’ll already be saving tons on energy costs: a lot of air escapes and heat is transferred between this particular partition. Plus, by law, insulation in this wall is required to be fire-rated (due to the high probability of combustible liquids stored in this “room” and its lack of smoke detectors), which adds an extra layer of safety to the space. And don’t forget the ceiling: If an attic or bedroom rests above, insulating this “horizontal wall” is crucial. Also, you can insulate the door with ready-made kits that seal and prevent any problematic air gaps.

Which Garage Insulation Is Best?

There are a couple options when it comes to insulation. Each depends on your budget, whether you do it yourself or hire a contractor, and your personal needs:

§  Batt insulation: This cotton-fiberglass material is fairly inexpensive and easy to use: simply place it in between the studs, staple a vapor barrier to cover it, and you’re in business. However, for it to work effectively, you’ll need to wall it up as well. Therefore, you’ll need to buy and install 1/2-inch drywall around the room (though ceiling and walls adjacent to living areas typically require 5/8-inch drywall). This may require the work of a garage contractor, depending on how handy you are and how good you want the final product to look. It adds to your cost but if it’s worth being done, then it’s worth being done right.

§  Blown-in insulation: If you already have drywall installed around your garage but don’t have it insulated, then blown-in insulation may be the answer. A contractor will come and open up a hole in the wall, pump in a cellulose insulating material, and then patch up the opening. Blown-in insulation is quick and can be done within a few hours without any additional demo or reinstallation. However, it may be a bit more expensive since contractors usually charge a minimum fee no matter the size of the space or the time it takes.

§  Foam board: If you don’t want to install drywall, you may be able to cover the batt insulation with rigid foam board. But check with your local building codes to make sure it has a radiant barrier and guarantee that it is flame tested.

Proper Sealing

Once the garage insulation is installed, it’s important to take a quick inspection of the area. Since there are a lot of dangerous chemicals around this space, and since cars give off a lot of exhaust (and dangerous carbon monoxide), you’ll want to be sure everything is sealed off. Caulk around the bottom of the drywall and seal it to the floor. Weatherstrip the door leading into the house. Possibly buy a metal door for extra fire safety and always make sure it self-closes. And examine around any windows, electrical outlets, and the garage door for air leaks that may need to be addressed to ensure energy efficiency.

This article was originally written by Marc Dickinson and originally published on


Negotiating Tips for Home Sellers


In an ideal world, every homebuyer and every home seller would get exactly the deal they want for their real estate transaction. In reality, the best deals are the ones in which each side feels they got most of they wanted and didn’t have to give up too much to the other side.

As a seller, you will be best served by stepping back and letting your REALTOR® take the lead in negotiating on your behalf—even if you consider yourself an expert negotiator in other areas of your life. You should absolutely be involved in the behind-the-scenes discussion with theREALTOR® representing your interests, but try to avoid direct negotiations with the buyer or the buyer’s agent in order to keep the process impersonal.

Top Tips for Sellers

Avoid emotional decision making: When you are selling your home it can be hard to detach yourself from the process. After all, you’ve enjoyed your life in the property, given it your personal touches, and maybe even raised your family there. Now, though, you need to look at your residence as a business prospect and try not to take any offer or any comment personally.

Rely on your REALTOR®: Prospective buyers typically have a buyer’s agent representing their interests and you should have a listing agent who is representing yours. If you have chosen the right agent, you should feel comfortable letting him take the lead in negotiations to get the best possible outcome for you. Your REALTOR® will know current market conditions better than you and can negotiate with the market in mind.

Always make a counteroffer: Many sellers find a lowball offer insulting and would rather ignore it, but you are better served by acknowledging the offer and beginning the negotiating process. After all, the buyers are at least interested in purchasing your home and it is worth trying to come to a mutually acceptable agreement.

It’s not only about price: It is easy for sellers (and buyers) to fixate on the offer price, but in reality what matters more is your final profit on a completed transaction with an agreeable settlement date. You can negotiate about the price of your home, but remember that it’s equally important to make sure the buyers have financing in place so they can make good on their offer. Sellers and buyers can also make agreements about repairs to the home, who will pay the closing costs and which items convey to the buyers in addition to the settlement date. If you are having trouble getting to an agreement on one issue, it’s possible that a concession on another topic will help cement the deal.

Determine who has the upper hand: You and your REALTOR® can evaluate local market conditions to see whether buyers or sellers generally have more power, but you both can also make this determination based on what you learn about an individual buyer. If you are a desperate seller who has already had an offer accepted on your next home, you may need to be more lenient in negotiations; but if your buyer needs to move faster and there are few homes available for sale, you could have more power.

Move quickly: While it may be tempting to wait and see what other offers come in, REALTORS® often note that the first offer is often the best one and sometimes the only one. If the offer is close to what you had hoped for, keep the momentum going and make a counteroffer so the buyer doesn’t have time to lose interest.

You and your REALTOR® should work closely together to handle negotiations with potential buyers, but before you get too caught up in the process it helps to establish your priorities for your home sale. Once you know your bottom line in terms of profits from the sale and any other details, you can move forward more easily in the transaction.



How Do I Appeal a Property Tax Assessment

QUESTION: I just received my property tax bill in the mail and it shows a new assessed value for my property, so my taxes are higher. What does a tax assessor do? How does a tax assessor determine property values? Can I appeal the assessment?

ANSWER: While no one likes to pay a bigger property tax bill, the silver lining to getting a higher assessment is that your property has increased in value. Your higher value probably doesn’t matter much to you right now unless you intend to refinance your mortgage, take out a home equity loan or sell it, but having more equity in your property and owning an asset that is increasing in value is definitely better than learning that your home has declined in value.

Your property tax assessment has been calculated by a tax assessor, an employee of your local government whose job it is to determine the value of various properties. Most properties are evaluated every one to three years to estimate their value for tax purposes.

Although the work a tax assessor does is similar to an appraiser, there are some differences. An appraiser is either self-employed or works for an appraisal company and is hired by a lender or an individual to determine fair market value for a property. Appraisers typically do a physical inspection of a property inside and out, in addition to relying on market statistics and other data. Tax assessors sometimes physically visit a home, but they rarely go inside a property. They base their property assessments on the estimated values of nearby properties and use computer programs to generate a value for your home.

An appraisal for sales purposes can vary by as much as 10 to 15 percent or more compared to a tax assessment because it’s based on the most recent market conditions. This is particularly true in areas where homes are assessed only every three years, since market conditions can change dramatically in that time and home values could have risen or fallen significantly. In many cases the assessed value is lower than the actual market value of a home.

It is important to realize that a tax assessor isn’t actually determining what you will pay in property taxes. In most states, the local governmental bodies set tax rates that are applied to every property owner. The tax assessor doesn’t have anything to do with setting tax rates or with collecting taxes. The only role of the tax assessor is to estimate your property value.

Appealing Your Assessment

If you believe the assessed value of your home is too high, you do have the right to appeal your assessment. Your property tax assessment should have an explanation of how to make an appeal on the form you received in the mail, but you can also search your local government’s website to find out how to begin the appeal process. Be aware that you will have to start the appeal process by a date established by the local property tax office. For example, in Washington, DC, property tax assessments dated Feb. 28, 2014, must be appealed by April 1, 2014. An appeal sent after that date will not be accepted.

Your appeal will need to be accompanied by a concrete reason why you believe the assessment is wrong, not just from an estimated value on a real estate website or an opinion. You should provide documentation of a recent homeowner’s insurance evaluation, a recent appraisal or, if you refinanced or purchased this home recently, a settlement statement.

If your appeal does not result in a lower assessment, and you anticipate being unable to make your higher tax payment, you should immediately contact your local property tax office and discuss options for tax relief.


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