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Buying A New Home VS. Previously Owned Home

by Jon Smith, CRB, CRS, GRI
TODAY'S FEATURED PROPERTIES

 

 

Although new homes typically have a higher sales price than comparable existing homes, buyers are willing to spend more upfront with an understanding that part of what they are paying for is assured low maintenance costs. A builder's warranty, along with brand-new roof, appliances, furnace, and other operating systems that make major repairs unnecessary, work together to counteract possible slower appreciation initially. Data from the U.S. Census Bureau's 1991 American Housing Survey suggest that operating costs per house are lowest for brand-new homes, slightly higher for relatively new existing homes, but lower on average for older existing homes. Measured per square foot of living space, however, operating costs are consistently higher for progressively older existing homes. Utility costs are the largest component of operating costs. Energy consumption per square foot depends on size of the home, insulation, window quality, air leakage and efficiency of the furnace. Operating costs also include expenditures for both routine maintenance and major repairs.

Neighborhoods: known or unknown commodities

When you buy a resale home, you can find out a lot more about the property and the neighborhood before you buy than when you buy a new home. Land to support new-home developments usually is located on the outskirts of town. Potential buyers should ask the developer about future access to public transit, entertainment activities, shopping centers, churches, and schools. Local zoning ordinances also should be reviewed. A rather remote area can turn into a fast-food-chain haven within a couple of years. Try to ensure that the neighborhood, if not strictly residential, will not begin sprawling out of control.

Buying into a new-home community may seem riskier than purchasing a house in an established neighborhood, but any increase in home value depends upon the same factors: quality of the neighborhood, growth in the local housing market and the state of the overall economy. One survey by the National Association of Realtors shows that resale homes do have an edge over new homes. The trade group's figures show the median price of resale homes increased 3 percent between 1994 and 1995, compared to 0.8 percent for new homes in the same period.

Before making a choice between adding on to an existing home or buying a larger one, consider these questions:

    * How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house?
    * How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?
    * What do local zoning and building ordinances permit?
    * How much equity already exists in the property?
    * Are there affordable properties for sale that would satisfy housing needs?

Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value. According to Remodeling magazine's annual "Cost vs. Value Report," remodeling a home not only improves its livability but its curb appeal with potential buyers. The highest paybacks come from updating kitchens and baths and, most recently, adding on a home office, according to the survey.

First-Time Home Buyer Tax Credit - Is it Right For you?

by Jon Smith, CRB, CRS, GRI

TODAY'S FEATURED PROPERTIES

As a first time home buyer you can now take advantage of the new tax credit being offered.  This is called the Housing and Economic Recovery Act of 2008.  This Act includes a number of provisions that will help prevent foreclosures and reinvigorate the housing market as well as strenghten the nations economy.
If you feel the time is not right for you to buy your first home you might be interested in learning more about this Tax Credit that was created just for you.  And, then look at your credit then the interest rates available.  This might be a great time for you afterall.

Do You Qualify for a Moving Expense Deduction?

by Jon D. Smith
Have you recently moved or relocated as a result of a new job or job transfer? If yes, you might like to know that some of the costs associated with a move of this type may be used as a moving expense deduction on your income taxes. A few of things to keep in mind that help in determining if you would qualify for a moving expense deduction include:

  • The distance between the old home and the new job must be at least 50 miles
     
  • If you move within a year of taking the job at the new location
     
  • If you work full-time for at least 39 weeks (the total is 78 weeks if you are self-employed)

Whether a homeowner or renter, you can deduct the cost of moving household goods and the direct cost of moving you and your family. You can also deduct expenses for lodging during the move but not meals.

It is important to keep detailed records of all expenses during a move and
consult a tax expert to make sure that you take all the lawful tax deductions allowed by the IRS criteria for expenses related to selling your old home or buying your new one. For additional reading regarding moving expenses, the IRS publication No. 521 entitled "Tax Information on Moving Expenses" is also a great resource.

Displaying blog entries 51-53 of 53

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Photo of Jon Smith, CRB, CRS, SRES, SFR Real Estate
Jon Smith, CRB, CRS, SRES, SFR
Iowa Realty
3521 Beaver Ave.
Des Moines IA 50310
515-240-2692
Fax: 515-453-6404
 

 

 

Licensed in the State of Iowa