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The Biszantz Connection Tips for getting the most money and multiple offers for your listed home.

How to sell your home fast with multiple offers? Listen to this!

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How to Help Your Family Members to Buy their First Home

I found this interesting article on how parents can help their children to buy their first home. There is a way, though, I would suggest  that you consult with the bank or what your partner thinks about it.

SHARED EQUITY: HELPING FAMILY MEMBERS BUY THEIR HOUSE

Written by Benny L. Kass | source: http://realtytimes.com

This is an arrangement where you — as investors — own a portion of the property with your children. Under a shared equity arrangement, there generally are two separate entities. You (and your spouse, if applicable) would be considered the owner-investors, and your son and daughter-in-law would be considered the owner-occupants. The four of you would take title to the property. You could own fifty percent, for example, with your children owning the remaining fifty percent. Your children, as owner-occupants, would pay half of the monthly principal, interest, taxes and insurance, as well as half of the estimated fair market rental of the property. You, as owner-investors, would pay half of the monthly costs, would receive the rental income, but would also be able to get some tax benefits if the transaction is properly structured.

In today’s market conditions, where prices are clearly higher than many young couples can afford, shared equity may be the only way to permit our younger generation to get into the home ownership arena.

Here is a general outline of how shared equity works. Although there is no magic formula by which one takes title, often — especially when dealing with family — title is taken on a 50-50 split.

The owner-occupant and the owner-investor each pay 50% of the monthly mortgage costs and taxes. Both parties are entitled to deduct from their income taxes their share of the mortgage interest and the real estate taxes. The owner-occupant pays rent to the owner-investor.

In our example, because your children — as owner-occupants — will only own half of the house, they will have to pay 50 percent of the fair market rental to you as owner-investors. This rental is considered income to an owner-investor, and must be included in your tax return. The main advantage for the owner-investor is that you can depreciate 50% of the property. However, this depreciation is subject to the passive tax rules which Congress enacted with its sweeping tax reform legislation in 1986.

There are a number of legal requirements for qualifying for the shared equity program.

1. The owner-occupant must pay a fair market rental for the portion that he or she does not own.

Perhaps the best way to determine this fair market value is to ask a real estate agent to give you a statement in writing as to what they believe is the fair market rental of the property. With such a document in your files, you should be able to justify the rental if and when the IRS comes knocking at your door to challenge the shared equity concept. A Tax Court opinion has ruled that owner-occupants could pay a somewhat lower rent than fair market rental because the investor will not have any vacancy losses, and because the owner-investor will save the additional costs of hiring a property manager.

A safe harbor would be to deduct 15% from the fair market value, and then your children, as owner-occupants would pay half of that amount to you.

2. There must be an equity sharing agreement. This document, which must be in writing and signed prior to the purchase of the property, should spell out the terms and conditions between the owner-occupant and the owner-investor.

For example, when will this agreement terminate? Who has the right to buy out the other, and under what terms and conditions?

These very serious questions must be resolved, and it is strongly recommended that you do so now while you are still talking with your children. As harsh as it may sound, parents and children often get into major fights, and you do not want to wait until you start having problems in an effort to resolve these important questions.

3. One of the owners must actually occupy the property as his or her principal residence.

Read more at http://realtytimes.com

Help Your Family Members to Buy their First Home, SHARED EQUITY:

I wanted to share this article I found at realtytimes.com. I am sharing this as a way for us to be informed and updated with the real estate industry. After all, real estate is an investment and we are doing our best to keep you in the loop.

IMPORTANT CLAUSES IN YOUR REAL ESTATE CONTRACT

Rent, Insurance, Cars, and Loans, Expected to go up by 2016

2015 has been a roller coaster ride for everyone. There were ups and downs that almost drove everyone to the wall. However, if you were like me who is actually looking forward to 2016 just because the year of the sheep has not been cooperating well. Anyway, I would like to share this article I found online that may or may not put us to a panic mode.

This article can give us more insights on what to expect next year and prioritize the plans that we have placed on hold this year. If you are renting, this might be the best time to actually own your house and stop renting before interests go up and the loan process harder.

Here’s a look at what could cost more in 2016.

1. Rent.

Residential and commercial property rental costs could rise in 2016, and not just in red-hot residential markets like San Francisco and New York. Michael Levin, associate professor of marketing at Otterbein University in Westerville, Ohio, says residential rental markets that have not been hot for the past several years, such as Cincinnati and Dallas, could see rising rents. “Demand is finally catching up with supply, and it’s squeezing the available supply, so residential rents will increase,” Levin says.

The Zillow Home Price Expectations Survey, which surveyed 101 real estate experts in January, found that more than half of the experts said they expect rental affordability to worsen for at least another two years.

2. Borrowing money.

Mortgage rates sat at historic lows the past few years, which was favorable for those looking to refinance or finance a new home. The U.S. Federal Reserve did not raise interest rates in 2015 as expected, but it could increase rates later this month or next year. If that happens, homeowners with home equity loans will pay more, as will people taking out new mortgages, points out Chip Manning, director of the Babson Center for Global Commerce at Sewanee–University of the South. “I think you’ll see upward pressure [on housing prices] because of the fact that people will try to get in under the wire [before rates increase],” he says.

3. High-tech home appliances.

Home appliances are going high tech, and more bells and whistles often translates to higher prices. “More products have home automation, app inclusion and voice inclusion,” says Howard Schaffer, vice president of merchandising at Offers.com. “It’s everything from high-end appliances down to your light switches, light bulbs and even crockpots.” However, if you’re in the market for a basic model that doesn’t sync with your phone or offer other features, then you likely won’t notice much of a price increase over this year, according to Schaffer.

4. College costs.

The College Board reports that the cost of undergraduate tuition at public and private universities for out-of-state students rose more than 3 percent between the 2014 to 2015 and 2015 to 2016 school years. Despite talk on the presidential campaign trail about plans to rein in college costs, Manning says there’s an “arms race” in the college space. “They’re still building nice facilities, and a lot of the colleges are doing more in the area of research, which can impact the cost structure,” he says.

MOOCs (massive open online courses) and online schools have been hot topics over the past seven or eight years because of their potential to drastically reduce college costs, Manning adds. “It just hasn’t materialized [on a large scale],” he says. “I think it will eventually have an effect, but I don’t think we’ll see that in the foreseeable future.”

Read more at money.usnews.com

Items to go up by 2016, what could cost more in 2016

Mortgage Rates Modestly Lower Ahead of Big Jobs Report

BY: MATTHEW GRAHAM

Source: http://www.mortgagenewsdaily.com

Mortgage rates continued their recent trend of almost imperceptible movement today.  This time, things improved ever-so-slightly with most lenders lowering the upfront costs associated with prevailing rates.  In other words, the underlying market movement continues to be small enough that rates, themselves, are rarely changing from one day to the next.  Instead, it’s the upfront borrowing costs (or lender credit, depending on the scenario) that are acting as the fine tuning adjustments.

In terms of coarse adjustments, most lenders are quoting conventional 30yr fixed rates of 4.0% on top tier scenarios, though 3.875% is still fairly prevalent.

All of this narrow range business could change abruptly in the next two weeks, and certainly as early as tomorrow morning.  The Employment Situation Report (or “jobs report”) is the most important piece of economic data on any given month, and this iteration is doubly important because it will either help or hinder the Fed’s rate hike efforts.  As recently as last week, a top fed official specifically referenced this week of data and the next as playing key roles in determining the Fed’s course of action.

Tomorrow’s jobs data is undoubtedly the biggest piece of data during that time.  Therefore, if it makes a strong comment for or against hiking rates, financial markets may respond in a big way.  That means much bigger potential changes for mortgage rates first thing tomorrow morning.

Loan Originator Perspective

“Bonds stayed within a narrow range again today, and rates were essentially on par with Wednesday’s. Looks like it’ll take either an unexpectedly strong/weak NFP report tomorrow, or more Fed guidance from their next statement to move rates up/down. There’s certainly nothing wrong with current rates, and floating into NFP is inherently risky. Locking removes your risk, and I am recommending that for my clients within 30 days of closing. Whenever the next rate move hits, it may be both large and fast. The question is when that happens, and my crystal ball is broken today.” –Ted Rood, Senior Originator

Today’s Best-Execution Rates

• 30YR FIXED – 4.0
  
• FHA/VA – 3.75%
• 15 YEAR FIXED – 3.25%
• 5 YEAR ARMS –  2.75 – 3.25% depending on the lender

 Click Here to Read more about this article.

15 YEAR FIXED, conventional 30yr fixed rates, Mortgage Rates Modestly Lower