The Advantages of Home Ownership
Is Owning a Home the Way to Go?
You've been renting for awhile but now you're feeling something's missing--a
sense of security, or a gut feeling that your monthly payments are going
into a bottomless pit. You think it might be time to move in another direction.
You're ready to buy a home, but you have some questions about the benefits
of home ownership. Look around these pages and see if the answers found
here help you make that final decision to go ahead with your dream to
buy a home.
| | Tax Advantages
The US government allows tax incentives that make it possible for
many homeowners to exceed the standard yearly deduction. Your state
may offer the same benefits. You may be able to:
• Deduct the yearly interest on your primary and
vacation home. This amount equals a big chunk of your total payments
for the first several years.
•Deduct the total amount of your yearly property
tax bill. You might wish to refinance to consolidate other debts.
These loans typically carry a lower interest rate than the debts
they replace, plus, the interest on the home equity loan is tax
deductible. Stable Costs
While rental fees may be unpredictable, monthly house payments remain
fairly constant. Although monthly payments can change if property
taxes and insurance go up, increases usually happen gradually.
An adjustable rate mortgage can also result in higher,
less stable payments. Which type of mortage loan is best for you
should be discussed with your lender before selecting a loan. Appreciation
No one can make any guarantees, but over time most real estate purchases
increases in value. If you are careful about your selection and
you treat the home kindly it will likely be worth more in five years
than it was the day you bought it. Your initial investment may be
as little as 3% (or less) of the home's sales price, but you are
the one who benefits from appreciation of the property. Equity
Even though interest makes up a good portion of your monthly payment,
the amount paid toward principal increases each month. Paying down
the principal increases your equity in the home: the portion of
the home's value that is truly yours should you decide to sell.
Appreciation and equity work together, helping you use your initial
investment to generate more wealth or give you the ability to move
into a higher priced home. Control
The house is yours. You are the only one with the power to allow
anyone to enter the house to inspect it, do work on it, or decide
when to sell it. You may paint it and decorate it in any way you
wish, put nails in the walls to hang pictures and artwork, or tear
down a wall. You can bring home a pet without asking anyone if it's
OK. It belongs to you.
|
Selling Your Home
How to value your property
To fully answer that question you must keep in mind that ‘value’
is subjective. That means that one individual may think some thing is
worth more than another individual. Because of this, the term "fair
market value" was established. Fair market value is the amount that
a willing buyer will pay and a seller will accept.
How to establish "fair market value"?
That is a multi-faceted question requiring effort and is best answered
by a qualified real estate agent. However, by taking a little time
and using a few tools, you can determine an approximate value which allows
you to become a more informed consumer.
Using the list of comparables sales, attached to the
property profile, here is the process we suggest:
| 1. | Identify the properties that are most
'similar' to the property you wish to value. |
| | a. | Review Square footage (it should be near the square
footage of the property you wish to value). |
| | b. | Review the number of bedrooms and bathrooms (each should
be roughly the same number as the property you wish to value). |
| | c. | Review the size of the lot (it should be approximately
the lot size of the property you wish to value). |
| 2. | Mark the properties, among these identified
'similar' comparables, that are in neighborhoods most like the property
you wish to value. |
| 3. | Seeing the properties may be necessary,
evaluate which properties, among these comparables, have a quality
of appearance and overall condition similar to your chosen property
(consider: paint, roofing, landscaping and style). |
| 4. | List the transfer values of those properties
and use that range of values as an indicator of your 'estimated fair
market value'. |
Home Warranties
Will offering a home warranty make your home more attractive to buyers?
Home warranties protect major appliances and residential systems such
as electrical, plumbing, heating and air conditioning from service repair
costs to the new owner. Having peace of mind from covered repair bills
may be worth the extra cost of purchasing a home with warranties.
Property Disclosures
Laws vary, but most sellers are required to disclose material facts about
their homes; things such as leaky roofs, bad plumbing, and other problems.
Here are some things which are considered material facts and need to be
addressed.
| | Environmental Hazards
Learn how to deal with environmental hazards such as radon, buried
oil tanks, lead based paint, and asbestos. Asbestos
It's not uncommon to find materials containing asbestos in building
elements of homes. This subject page leads to all the information
you need to inspect and care for asbestos siding and other building
materials that may contain asbestos.
As long as asbestos remains intact it is not a danger.
This document provides tips to help you care for products that contain
asbestos. PA's fact sheet provides an overview of asbestos, and
recommends encapsulation rather than removal of most asbestos materials.
Lead Based Paint
If a residence was built prior to 1978, the federal government requires
sellers and landlords to provide information to buyers and tenants
regarding their knowledge of lead paint on the premises. Radon Gas
Radon is an odorless, colorless, radioactive gas produced by the
breakdown of uranium in soil, rock, and water. It can be sucked
into your home as it escapes from the soil below. Find out more
about radon testing and learn what steps you can take to eliminate
it from your home if you feel it is a health risk. Underground Storage Tanks
Underground storage tanks buried on your property will create an
environmental hazard if they start to leak. Find the normal life
span of these tanks, and what to do when they fail. |
