Paying Too Much in Property Taxes?

More than half of homeowners pay too much because their property has been wrongly assessed.

Property-tax increases are based largely on rising home values, not the increase of taxes by local governments.  Different formulas are used to figure property taxes, but it all depends on a home's assessed value.  Some jurisdictions use a home's actual market value, while others use a percentage of a property's worth.

The National Taxpayers Union estimates that as much as 60% of taxable property in the United States is overassessed.  But only half of homeowners protest their assessments.  This means many may be paying more in property taxes than necessary.  Many taxpayers don't fight it because they don't understand the process, or because they can't stomach doing the research and providing evidence to prove the assessment is wrong.

If you really don't have the time or desire, hire a property-tax consultant or attorney to do the work.  Many of these consultants charge on a contingency basis, meaning they'll take a percentage of the tax savings if they succeed in lowering your assessment.

Mistakes happen more often than you think.  Many assessors don't even come onto your property to inspect it.  They simply compare a written description of your home with that of similar properties in your neighborhood.  Appraisers also may use historical information that's wrong.  A home's square footage, for example, might have been incorrectly calculated on original construction documents.

Here are additional tips to help you in the appeals process:

Housing Slump Could Linger

Economists are giving up on the idea that the U.S. housing slump will be quick and relatively painless.

Instead, more are concluding, the downturn that began nearly two years ago will last at least through the end of 2007, remaining a major drag on the U.S. economy. The culprits: a glut of homes for sale and growing caution among lenders who now regret being so free with their mortgages during the boom.

Most forecasters still expect the economy to regain some momentum this year after a slow first quarter. Recent data have shown manufacturing, business investment and trade on track to help offset the negative effects of falling home values on consumer spending. Even so, some economists expect economic growth this year to remain tepid, largely because of the weak housing market.

Some local markets remain strong, but in much of the country, home prices have been flat to moderately lower over the past year.

The outlook is confusing for the average home shopper, too.  Lenders have eliminated most no-money-down "subprime" loans for people with weak credit records. That means many people who hoped to buy homes this year will have to wait until they can clean up their credit records and save for a down payment.

If all the news of the housing slump has you confused about what to do and when to do it, give us a call or leave us a comment below.  We'll be happy to discuss your individual options with you, and help you determine whether now is the best time for you to look at real estate or not.

Home Renovations:  Think Smart

The thought of renovating your home to improve the price it will bring on the real estate market is an appealing one.  The question any home owners should be asking themselves is "what does my home NEED in order to obtain a higher selling price?"  Many home owners overlook obvious things their home needs in favor of cosmetic fixes or upgrades that magazines and TV say will increase their asking price.  The thing they forget is, without the basics the home will not impress people on a base level.  Sure it may have some impressive features but without the daily necessities, what's the point?

Before you start adding un-necessary extras to a home, take the time to make sure the everyday things are taken care of.  These can be simple things like working fixtures and faucets, updated appliances and clean floors.  The interior workings of the home should be checked and fixed if they are in need of repair.  There isn't much sense in a home having a brand new solarium and hot tub if the plumbing system is in disrepair and there is mold growing in and around the pipes.

Every homeowner should go over their home with a fine tooth comb and find those little everyday things needing an upgrade or a fix before jumping into major renovations.  You may find yourself making renovations only to have to go back at the end to repair something that should have been fixed before the building started.

Once the home is in tip-top condition and everything works as it should, then its time to consider making those price generating improvements.  Buyers will feel much better looking at a home with an updated electrical system, a current plumbing system and a new roof than a home with a few nifty extras and a host of possible problems.

Mortgage Closing Costs and Fees

Usually, closing costs are paid by the person purchasing the home, but with some mortgages (VA for example) the seller can pay closing costs. A little-known fact is that a big part of costs and fees actually go to third parties who process the mortgage, as well as local governments as taxes. The money doesn't go to the mortgage company.

Most people take closing costs and fees for granted and just pay what they are told. They don't question the mortgage or title company about the costs associated with a mortgage closing. That's too bad, because if you're a home buyer, you should!

As an informed mortgage customer, you should make your mortgage banker walk you through each cost, and explain in detail what you are paying. The bottom line is that you don't want to be surprised at the last moment. Imagine getting a call from your mortgage banker the day of your closing with a message that your closing costs are $1,200 more than you thought. And the only explanation is that the title company made a mistake. Chances are you may have to reschedule your closing to get the money together for the difference, or have your mortgage adjusted to have the amount rolled in.

To avoid a situation like this, it's a good idea to know exactly what the costs and fees are, how they are calculated, and why you (or the seller) have to pay them.

Closing costs and fees are part of a mortgage, and knowing what they are and how much they should be is a good idea. This will put you in a position to challenge a cost or fee that seems exorbitant. Even if everything is correct, you have the right to ask, and your mortgage company has the duty to explain — in detail — each and every closing cost and fee.

Have you paid closing costs before when buying a home and just paid them not knowing what you were paying for?  We'd love to hear your comments.  Click the comment link below and tell us about it.

Lower Home Sales and Prices Predicted

A real estate industry trade group said recently it expects sales of existing homes to drop 4.6% this year to 6.2 million.  Two months ago, the group had predicted a 2.2% decline for the year.

The National Association of Realtors (NAR) is now forecasting sales of new homes to drop 18.2% to 860,000 compared with an earlier estimate of a 14.2% decline.

The NAR also predicts the median price of existing homes, which make up about 85% of the market, will fall in 2007 for the first time since the 1960s, when the group began keeping records.

The predicted decline comes after a 1% gain in home prices last year and an increase of more than 12% in 2005.  Next year, though, the NAR expected the market to rebound, and existing home prices are forecast to rise 1.7%.

What a lot of home buyers don't realize is… NOW is the best time in years to find a home.   When the real estate market is red hot and all these figures are reversed, it's not the best time to be buying real estate.   So if you've been putting off buying a new home because of all the negative news lately.. think again.  NOW is the time to start your search before the market turns around.