Asbestos was utilized throughout the 20th century as a major form of piping, insulation and flooring, and is a fibrous mineral acclaimed for its fire resistant qualities. Anyone seeking to remodel homes prior to 1980 should be aware that asbestos exposure can cause serious health concerns for you and your family. There are now many resources available for citizens to remove the material in a safe manner. A devastating form of asbestos cancer is known as mesothelioma. This disease has varied effects on victims, but patient prognosis is usually poor. Since asbestos illness has a latency period that can last anywhere from 20 to 50 years, it is expected that cases will rise of the next few years and peak in 2015. Although undisturbed asbestos usually does not present a danger, steps should be taken to remove the material. The removal process must be performed by licensed abatement contractors who are not only trained in handling hazardous materials, but follow state and federal regulations. There are now many healthy options that replace the need for asbestos. The use of recycled building materials such as cotton fiber and lcynene, provide peace of mind and lower energy costs. These green alternatives not only allow for a safe living environment free of toxic materials, but can lower your carbon footprint and help achieve a healthy lifestyle. (Source: Mesothelioma Cancer Center)
Lead-based paint contains a toxic metal that was used for many years in paint and was banned for residential use in 1978. Exposure to lead can result in health concerns for both children and adults. Children under six years of age are most at risk because their developing nervous systems are especially vulnerable to lead's effects and because they are more likely to ingest lead due to their more frequent hand-to-mouth behavior. If covered and undisturbed, lead-based paint is harmless, but when molested during removal or construction, the dust of this paint is very dangerous. (Source: jjkeller.com)
Wednesday, November 25, 2009
Tip of the Week: Falling for Frills
Question: My wife fell in love with a built-in microwave oven and insists we buy a house that is overpriced and out of our financial range. Any advice?
Answer: This is one of the typical mistakes a house-hunter can make – buying the frill instead of the house. All too often a family will fall in love with an eye-catching feature and buy the wrong house. Yielding to superficial attractions like these can result in your family ending up with a thoroughly unsuitable house. Bear in mind that the same alluring feature can usually be added to another house at a relatively small cost compared to the total purchase price.
Let us know your questions so that we can include them in future Weekly Updates: team@bockrealestate.com
Monday, November 23, 2009
Home Buying Hazards: Mold and Radon
Two home buying hazards common in Central Iowa are radon and mold.
Radon is an element released by naturally occurring radioactive materials in the soil. This gas product is radioactive and increases the probability of lung cancer when inhaled. This is a gaseous element which enters the home through the basement from the soil, and generally remains in there because of its mass. The only way to effectively "treat" radon gas is to lower the concentration, which is done by increasing airflow to the area and more effectively sealing it out in the first place. Mitigation is most commonly practiced by installation of a fan which moves air through the basement continuously, which doesn't allow the heavy gas to accumulate.
Mold is estimated to be in approximately 10 percent of all U.S. buildings. There are many mold types but only some are toxic. Mold prefers to grow on organic materials and grows most rapidly under the correct temperature and moisture conditions. Mold is most dangerous when microscopic spores are inhaled and an infection results, but allergic diseases such as asthma are also common and dangerous. Mold prevention is the easiest and most effective defense against mold. Temperature, grow substrates, and moisture are all key to mold growth, and of these moisture is the easiest factor to control. The lower the continuous moisture levels, the better. Growth substrates can be chemically treated to prevent mold growth as well.
Follow up Wednesday for more info about Asbestos and Lead-based Paint!
Radon is an element released by naturally occurring radioactive materials in the soil. This gas product is radioactive and increases the probability of lung cancer when inhaled. This is a gaseous element which enters the home through the basement from the soil, and generally remains in there because of its mass. The only way to effectively "treat" radon gas is to lower the concentration, which is done by increasing airflow to the area and more effectively sealing it out in the first place. Mitigation is most commonly practiced by installation of a fan which moves air through the basement continuously, which doesn't allow the heavy gas to accumulate.
Mold is estimated to be in approximately 10 percent of all U.S. buildings. There are many mold types but only some are toxic. Mold prefers to grow on organic materials and grows most rapidly under the correct temperature and moisture conditions. Mold is most dangerous when microscopic spores are inhaled and an infection results, but allergic diseases such as asthma are also common and dangerous. Mold prevention is the easiest and most effective defense against mold. Temperature, grow substrates, and moisture are all key to mold growth, and of these moisture is the easiest factor to control. The lower the continuous moisture levels, the better. Growth substrates can be chemically treated to prevent mold growth as well.
Follow up Wednesday for more info about Asbestos and Lead-based Paint!
Wednesday, November 18, 2009
Home Buying Hazards Overview
When purchasing a home, safety is always of the utmost importance, given you will spend vast amounts of time there for years to come. So what are the common culprits that make a home unsafe and how do you deal with them as a homebuyer? The list of things that can be hazardous in a home is almost endless, but lead-based paint, asbestos fiber, radon gas, and mold are the most common worries of buyers today in Ames and Central Iowa. Although any of these elements is potentially dangerous, their presence alone does not make them an immediate danger. In fact, many homes will have one or more of these elements which never happen to affect the occupants. Lead-based paint that has been covered and remains unmolested is a frequent and rarely harmful occurrence. Asbestos fibers that don't find a way to your lungs via the air are also harmless. Very few house basements actually have "no" radon gas, and people with high radon levels that rarely visit their basements may go virtually unaffected. I'm not claiming these things as any less hazardous, but the truth is you can't get bit by a snake you don't encounter. The next few posts this month will cover more specifically these hazards you could encounter.
Tip of the Week: Beware of Net Listings
Question: I told my real estate agent that I wanted $120,000 for my house. He offered to sell it if he could keep anything OVER that amount as his commission. What do you think?
Answer: If an agent proposes to guarantee you a certain sum from the sale of your home in return for the chance to keep anything OVER that amount, you have been offered a “net listing”. This arrangement is open to so much abuse that it is illegal in about half of the states, including Iowa. Any number of complications can arise. The AGENT’s interests are now paramount although the law requires that you, the client, must come first. If you find yourself in this situation… RUN!
Let us know your questions so that we can include them in future Weekly Updates: team@bockrealestate.com
Friday, November 6, 2009
Current Event: NEW AND IMPROVED Homebuyer Tax Credit
This blog post was specially written by Lisa Severseike of Global State Mortgage, one of our preferred lenders!
Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:
They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:
They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
Thursday, November 5, 2009
Tip of the Week: Don't Count on Oral Promises
Question: I am about to purchase a home. The builder promised that everything wrong will be taken care of and that a handshake will save a lot of paperwork. Should I trust him?
Answer: Many a business agreement has been made with a handshake and enforced by the courts. But when it comes to the never-never world of real estate, you cannot and should not rely on oral promises. In fact, the law in all states specifically requires that all agreements and conditions relative to the sale of real estate specifically be in writing to be enforceable. The way to put teeth into oral promises is to insist that everything significant be put in writing.
Let us know your questions so that we can include them in future Weekly Updates. E-mail us at team@bockrealestate.com
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