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The other day I was attending a home inspection with one of my Buyer clients.  The  Home Inspector discovered some bugs that he thought were bed bugs.  My Buyers asked me a good question, “Do Seller’s have to disclose bed bugs to potential homebuyers?”

Bed bugs are becoming a major problem everywhere in the United States.  But, the bed bug problem is huge in the state of Ohio.  CBS Evening News recently had a story of the  “Top 15 Worst Cities For Bed Bugs!”  The State of Ohio has 4 cities in the top 15.   Eeek Gads!!!

The answer to this question above might not be as straight forward as you think.

In a residential real estate transaction most states do require a property disclosure form.  But, many states, including Ohio, do not specifically address bed bugs in their disclosure form.  In my opinion, the state of Ohio residential property disclosure form is inadequate and needs to be greatly improved.

In the State of Ohio we have a four page Residential Property Disclosure (RPD) Form.  A Seller is required to disclose any material problems or defects on their property that has occurred over the past five years.

The definition of a “material defect” is any problem with a home that would affect a Buyer’s decision to purchase the home or affect the value of the property.

The State of Ohio RPD has 14 sections (A-N) that address such items as; structural, roof, water intrusion, mechanical, wood-boring insects, etc.  But, there is no specific section for disclosing bed bugs.  So, if there is no section in RPD do Sellers have to disclose?

I am not an attorney!!!  But, if you are a Seller struggling with what to disclose then I would use common sense and follow these 2 steps:

  • The best approach for any Seller is “when in doubt always disclose”.  Many Sellers do the exact opposite and disclose nothing.  Sellers don’t want to jeopardize selling their home.  This is a huge, risky gamble for any Seller.
  • Ask yourself, “would a reasonable person think the problem would affect the value?”.  If the honest answer is yes, then disclose.

You would think it would be a “no brainer” on how to answer the question, “Do Seller’s have to disclose Bed Bugs?”.

Yes, Yes, Yes…..you should disclose to potential Buyers any TYPE of pest, insect or rodent infestation in your home.  This is not just limited to termites, carpenter ants, bed bugs.  But, also squirrels, rats, bats, etc. 

Any reasonable person would think that a bed bug infestation in their home would affect the value of the property.

So, in the State of Ohio, even though we don’t have a specific section in the RPD to disclose bed bugs, you would need to disclose under section N (Other Known Material Defects) 

Real estate disclosure procedures vary greatly from state to state.  If you have specific questions then you should contact an attorney, licensed real estate agent or your states division/department of real estate. 

I really need to finish this post.   Bed bugs are so creepy that my mind is playing tricks on me.  As I’m writing this blog post,   I’m itching everywhere.  I hope this is not happening to you.  LOL!

If you want a little giggle, then hover your cursor over the bed bug pics above.

Good luck out there!  I hope this information is helpful. 

Please feel free to contact me if you need help or have questions

Home Buyer Advocate Mike

Representing People, NOT Property!

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superman-logoIf you are looking for help to buy a home in Columbus, Ohio then you should contact a Buyer’s Agent.  But, not all Buyer’s Agents are the same.  The best representation for a residential or investor home buyer in Columbus, Ohio is an Exclusive Buyer Agent (EBA) or Exclusive Buyer Broker (EBB).  An Exclusive Buyer Agent will always look out for your best interest and protect you in the home buying process.

Here are the TOP 10 reasons to use an Exclusive Buyer Agent:

  1.  We ONLY represent buyers.  We are EXPERTS at buyer representation.
  2.  We negotiate the BEST price and terms for you.
  3.  We don’t sell homes.  We advise, counsel and educate.
  4.  We assist Buyers in evaluating the BEST financing options.
  5.  We have a duty to DISCLOSE all material information to our Buyer’s.
  6.  We are Buyer advocates that work to PROTECT your investment.
  7.  We are the GUARANTEED highest level of representation.
  8.  We SAVE you time and money.  We pay attention to the details.
  9.  We provide MORE available homes to our Buyer’s than most other  agents.
  10.  We locate, evaluate and negotiate for our Buyer’s.

For more information contact an Exclusive (true) Buyer Agent today. 

Helping home buyers is our only speciality.

A true Buyer’s Agent (EBA) will have no conflicts of interest….ever!superman-picture

An Exclusive Buyer Agent is NOT Superman.  But, we are the home buyers best protection and advocate in the home buying process.

Good luck out there.

Home Buyer Advocate Mike

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Treasury and FDIC

US Treasury and FDIC Bailout!

This past Summer, Congress passed a $300 billion housing bill to rescue Freddie Mac and Fannie Mae and to help thousands of homeowners avert foreclosure.

The housing bill should definitely help the volatile housing and financing markets. 

At the time, the housing bill was record breaking landmark legislation.  But, Oh my how much has changed in 2008:

 

Largest US bank failure – Washington Mutual, $307 billion in assets.

Federal Reserve intervenes to save investment bank giant “Bear Stearns”.  JP Morgan bank takes over Bear Stearns and receives $29 billion dollar loan from government.

IndyMac bank failure $32 billion in assets.

U.S. Government to take over failed AIG in $85 billion bailout.

In October, the new, largest government bailout in history to help US banks – $700 billion dollars.

There has been so much that has happened in the past 5-6 months that is easy to forget about one of the most beneficial aspects of the $300 billion bailout in July.  The $7,500 tax credit is a great benefit for 1st time home buyers.

Here is everything you need to know:

Eligibility:

  • Purchase a home between April 9, 2008 and June 30, 2009.
  • Must be a first time homeowner or haven’t owned a home in the last 3 years.
  • New home purchase must be your principle residence.
  • Maximum income requirements (Adjusted Gross Income) for full $7500 tax credit benefit is $75,000 for individuals and $150,000 for married couples.
  • Partial tax credit benefit eligible for adjusted gross incomes up to $95,000 for individuals and $170,000 for married couples (see phase out charts below)

  

  

Terms:

  • $7,500 tax credit is basically an interest free loan from Uncle Sam.
  • There is no application or approval process.
  • If you are eligible, you simply claim the tax credit when you do your 2008 or 2009 taxes (IRS form 1040).
  • Payment starts 2 years after you apply for the credit. 
  • Those qualifying for the full $7,500 tax credit will pay $500 once a year for 15 years.
  • If you receive less than the full credit your payment schedule will be 6.67% per year over 15 years.
  • Payment will be done via completing your federal tax return every year. 
  • You will owe nothing if you lose money on the sale of your home.  Also, regardless of the sale price, you will never have to pay money “out of your pocket”.   Here are 3 good examples that will better explain everything:
  1. Purchased a $200,000 home, sold 4 years later for $204,000.  At time of sale you still owed $6,500 on tax credit.  You would just have to pay $4,000.  The remaining $2,500 would be forgiven.
  2. Purchased a $200,000 home, sold 4 years later for $199,999.  At time of sale you still owed $6,500 on tax credit.  You lost money on your home purchase.  The entire remaining $6,500 balance would be forgiven.
  3. Purchased a $200,000 home, sold 4 years later for $225,000.  At time of sale you still owed $6,500 on tax credit.  You are responsible to pay the full $6,500 remaining balance.

Basic Q&A’s:

  • Are there restrictions on the location of the property?  Yes, property must be located in the United States.  Property outside the US is not eligible for the tax credit.
  • Are there restrictions related to the financing of the property?  Yes, if your financing is obtained via a mortgage revenue bond (example; a tax exempt bond related program from a state housing agency) then you will NOT be eligible for tax credit.
  • Are there any other types of financing restrictions?  No, all types of mortgage finance programs are eligible.  For example;  Conventional, FHA, VA, cash, sub-prime (boo hiss), non-conforming, etc.  Even cash purchases qualify as long as purchaser meets all other eligibility requirements listed above.
  • Are there minimum or maximum home purchase prices?  No, maximum home purchase price for tax credit.  Homes purchased under $75,000 will only receive 10% tax credit.  For example, Buyer purchases a $50,000 condo.  The maximum tax credit will be $5,000.
  • What types of housing qualifies for tax credit?  All types of home ownership qualifies.  For example, condos, co-ops, existing single family, new builds, manufactured homes, town homes, duplexes even houseboats!
  • What happens if I sell my home within 15 years?  You are not reading my post.  You are just “skimming” the article.  Review the last bullet point in terms section above.

I think the $7,500 tax credit is a great benefit for the first time homeowner.  If you meet eligibility requirements then you should really take advantage of this tax credit.

But, some home owners would say “What’s the big deal?  I still need to pay pay back the $7,500!”  I would tell you there are 2 very important things to consider:                                                            

Federal Bailout

Federal Bailout

  1. Basic economic principle called the “time value of money”.  Money now is more valuable than money in the future.  This principle is especially true now in this bad economy.  Cash is King!.  So, I guess my bachelors degree in Finance from the great Ohio State University was worthwhile.
  2. A tax credit is more valuable than a tax deduction.  A credit affects the tax amount you owe or refund amount dollar for dollar.  A tax deduction just reduces your adjusted income that is taxable.

IMPORTANT:  I’m just trying to help the “average Joe home owner” understand the $7,500 tax credit.  I have to put this CYA disclaimer in my post.  Please consult a tax professional for more details and eligibility questions regarding the $7,500 1st time home owner tax credit.  I’m not an accountant or tax professional.

Good luck out there

Home Buyer Advocate Mike

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It is still a great time to be a home buyer in the Columbus, Ohio area.  But, in my opinion, the real estate market has now started to turn in Central Ohio.  The market will gradually start shifting back to a normal market which is typically a Seller’s market.  There are 3 to 4 reasons why the real estate market in Columbus, Ohio is finally starting to change. Rising Rates!

Reason number 1:  Mortgage rates bottomed out at a few weeks ago at a low of 5.125% – 5.250%.  We have seen the end to flat, low home prices and super low mortgage rates.  Everything will start to rise  (interest rates and house prices) from this point forward.  I predict, in the next six to nine months will still see rates in the range of 6.00% – 6.75% and home prices just modestly increasing.  As home buyers we can’t really complain, mortgage interest rates in the “6” range is still really good.

Reason 2:  President Bush will sign the economic stimulus package in a few days.  In financial terms, the 170 billion+ package will not actually do that much to improve the economy.  But, it will help a little.  The main benefit of the economic stimulus package is that the consumer confidence in the economy and our government will increase because we were able to get something accomplished, even though that “something” was very small.

Reason 3:  My personal buyer activity has increased dramatically in the last 10 – 14 days.  I’ve been receiving a lot of phone calls and emails from interested home buyers with questions and looking for help.

Reason 4:  It’s all about supply & demand.  The inventory in the last 9 months has continued to drop drastically.  The end of last Summer we had 21,000+ listings on our multiple listing service(MLS) system. As of right now, we have a little more than 16,300 listings.  Granted the drop in the listings is mainly due to the slow winter and holiday season.  But, it is still a significant decrease.  Even with the listings going down, we are still at insanely high inventory levels.  The key months to watch inventory levels will be May, June & July.  How these three months go will probably predict the rest of 2008.

This is my prediction on where we are headed in 2008 for the real estate market in Columbus, Ohio.  Back in September of 2007 (about 5 months ago), I correctly forecasted in 2008 that we would see all mortgage programs with rates well under 6%.  Review my 5.99% or Lower blog post.  I did receive a few emails and phone calls from lenders that didn’t think I knew what I was talking about.  These lenders didn’t think rates would go that low.  I guess I got lucky on that forecast.  Again, I could be wrong or I could be right on my latest prediction for 2008.   I still think 2008 will be a great year for home buyers.  But, the buyer’s market is sort of over.  Good Luck!

HomeBuyer Advocate Mike

 

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Buyer's Resource Realty Services 7100 N. High St. Suite 204 Worthington, OH 43085
614.321.9577

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HomeBuyer Advocate Mike


Representing People, NOT Property in Columbus, Ohio. If you are a home buyer, then you need me to protect you. I can help you get the best price and terms for your next home purchase. You must use a true Buyer Broker! 1.614.805.7607

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