Blog - Leagan Realty

Understanding the Costs of Selling Your Home

October 22, 2024 by Lisa Eagan

Selling your home can be an exciting yet daunting process, and one of the most pressing questions you may have is, “What will it cost me?” The total expenses involved in selling a home can fluctuate based on various factors, including the sale price, any concessions you might offer to buyers, and the condition of your property. Understanding these costs upfront can help you plan better and minimize surprises down the road.

Key Expenses to Anticipate

1. Closing Costs and Commissions

One of the largest expenses you’ll encounter is the closing costs, which typically range from 2% to 4% of your home’s sale price. According to real estate experts, this means that for an average home sold in 2024, you could be looking at anywhere from $7,740 to $15,480 in closing costs. These fees cover various expenses such as title insurance, attorney fees, and taxes.

You might also consider covering some closing costs for the buyer to make your offer more appealing. While this can cut into your profits, it could ultimately facilitate a smoother sale.

2. Pre-Listing Inspections and Repairs

Many sellers opt for a pre-listing inspection to identify potential issues before they arise during the buyer’s inspection. Addressing these problems beforehand can prevent negotiations from stalling later. While a pre-listing inspection is not mandatory, your real estate agent can guide you on which repairs or upgrades offer the best return on investment. Whether it’s a fresh coat of paint or significant repairs, strategic spending can enhance your home’s appeal.

3. Home Staging Costs

In today’s competitive market, first impressions matter. Home staging can significantly impact how quickly your property sells and at what price. Staging costs typically range from $782 to $2,817, depending on the extent of the staging required. If you’re looking to save, there are also budget-friendly options your agent can recommend, such as decluttering and rearranging existing furniture to make the space feel more inviting.

The Silver Lining is Building Equity

While these costs may seem overwhelming, it’s essential to remember that many homeowners have built substantial equity in their properties over time. This equity can often cover selling costs and leave you with a profit that could help fund your next home purchase.

Why Partnering with a Real Estate Agent Is Key

Navigating the complexities of selling a home can be tricky, especially when it comes to understanding where to allocate your budget. While some expenses—like staging and inspections—are optional, skipping out on professional representation could be a costly oversight. A knowledgeable real estate agent not only helps you price your home competitively but also provides valuable insights on repairs and enhancements to attract buyers.

Ready to Take the Next Step?

If you’re curious about what costs to expect when selling your home or need guidance on the selling process, let’s connect! With the right information and support, you can make informed decisions that lead to a successful sale.

What’s Ahead For Mortgage Rates This Week – October 21st, 2024

October 21, 2024 by Lisa Eagan

The release of last week’s inflation data has left this week with very few significant data updates. The most important information will come from various Federal Reserve members speaking on different topics. They have consistently emphasized that they will closely monitor the data to decide whether further rate cuts are needed in their upcoming rate decision meeting. Much of the market is optimistic that rate cuts will continue. Additionally, several smaller retail sales data releases are expected soon, which will provide insight into the current strength of the economy.

Retail Sales

Retail sales increased 0.4% in September, with strength in a broad range of categories that overcame weak gas and auto spending, the U.S. Commerce Department said Wednesday. Economists polled by the Wall Street Journal had forecast a 0.3% gain.

Primary Mortgage Market Survey Index

15-Yr FRM rates saw an increase of 0.22% with the current rate at 5.63%
30-Yr FRM rates saw an increase of 0.14% with the current rate at 6.44%

MND Rate Index

30-Yr FHA rates saw a 0.01% increase for this week. Current rates at 6.13%
30-Yr VA rates saw a 0.01% increase for this week. Current rates at 6.14%

Jobless Claims

Initial Claims were reported to be 241,000 compared to the expected claims of 260,000. The prior week landed at 260,000.

What’s Ahead

A surprisingly light week ahead once again, with only the Federal Reserve’s Beige book and S&P Preliminary numbers for the Producer Manufacturing Index.

What You Need to Know About IRS Reporting When Selling Your Home

October 18, 2024 by Lisa Eagan

If you’re selling your home, you might be surprised to learn that certain information regarding the sale must be reported to the IRS. This requirement stems from the Tax Reform Act of 1986 and is meant to ensure compliance with tax laws and to assist the IRS with audits.

To make the process easier for you, here’s a clear explanation of what to expect when selling your property:

Who is Responsible for Reporting the Sale to the IRS?
According to IRS guidelines, the seller’s gross proceeds from the sale must be reported on Form 1099S. But don’t worry—you don’t have to handle this yourself. Typically, a settlement agent takes care of the reporting. This settlement agent is usually your escrow agent, title company, attorney, or real estate broker—basically, whoever is facilitating the closing process.

The settlement agent is responsible for collecting the necessary information and submitting it to the IRS. This includes details such as the seller’s name, address, taxpayer identification number (TIN), and information about the property and the sale.

What is an IRS Form 1099S and What Information is Reported?
Form 1099S is the document the IRS uses to collect information about the sale of real property. The settlement agent completes the form and submits it to the IRS. The information reported generally includes:

The seller’s name, address, and taxpayer ID number (such as a Social Security number)
A description of the property being sold, usually the address
The closing date of the sale
The gross proceeds from the sale, which may not necessarily be the taxable amount
Any additional details related to the transaction, such as real estate taxes paid in advance

What Types of Transactions Require a Form 1099S?
This form is required for most typical real estate sales, including single-family homes, townhouses, condominiums, and even certain commercial properties. However, there are exceptions. For instance, foreclosures, property abandonment, and refinancing transactions are excluded from this reporting requirement.

What Happens If You Don’t Provide Your Taxpayer ID?
The settlement agent is required to ask for your taxpayer identification number before closing. If you fail to provide this information, the settlement agent has a couple of options: they can delay the closing until you supply the necessary details, or they can complete the sale and report to the IRS that an attempt to gather the information was made.

Selling a home comes with many responsibilities, but understanding the IRS reporting requirements can help you avoid any unnecessary surprises during the process.

What Homebuyers and Sellers Need to Know About Statements of Information

October 17, 2024 by Lisa Eagan

When purchasing or selling a property, the title company plays a crucial role in ensuring that the transaction proceeds smoothly. A significant part of this process involves completing a Statement of Information (SOI), which helps the title company distinguish between individuals with similar names. This step is essential to protect all parties involved and ensure a clean title transfer.

What Is a Statement of Information?

A Statement of Information is a form requested by the title company from buyers, sellers, and borrowers when seeking title insurance. It contains personal details that allow the title company to differentiate the actual buyers and sellers from others with the same or similar names. This way, the company can accurately verify which documents and records affect the property and which do not.

Why Is a Statement of Information Important?

Various documents—like liens, court judgments, and bankruptcies—are recorded daily in real estate transactions. When the title company finds a record with a name matching or similar to that of a party in the transaction, it needs to determine if it pertains to the property in question.

If the record affects the title, it may be listed as an exception under the title policy. A properly completed Statement of Information allows the title company to correctly match documents to the right individuals, helping them rule out unrelated matters and preventing delays.

What Information Does a Statement of Information Include?

The SOI requests specific personal information, which may seem sensitive but is necessary to avoid delays and ensure accuracy. The details asked for include:

Full name (and spouse’s name if applicable)
Social Security number
Date of birth and place of birth
Citizenship status
Information about marriage or registered domestic partnerships, including dates and locations
Residential and employment history
Details on previous marriages or domestic partnerships

While the information is personal, the title company must distinguish you from others with similar names. This ensures the title search is thorough and accurate, ultimately protecting your interest in the property.

Is My Information Kept Confidential?

Absolutely. The information provided in the Statement of Information is kept strictly confidential and is used solely by the title company to complete the title search. This confidentiality ensures that your details are protected throughout the process.

What Happens if the Statement of Information Is Not Provided?

Failing to provide a completed Statement of Information can lead to complications in the title search process. At a minimum, it may slow down the issuance of your title policy, delaying the closing process. In the worst-case scenario, the title company may have to include exceptions in the title policy for liens, judgments, or other matters that they cannot confirm are unrelated to you.

Such exceptions can be problematic, as most lenders will not approve a loan unless they have a clear title policy. This could potentially halt the closing of your escrow and complicate the entire transaction.

Title companies strive to identify and mitigate any risks affecting your property to facilitate a smooth and secure transfer of ownership. By completing the Statement of Information accurately, you enable the title company to conduct a thorough title search, protecting your investment and ensuring a seamless closing process—all while maintaining your confidentiality.

Make sure to complete your Statement of Information promptly to avoid delays and guarantee a successful real estate transaction.

What Sellers Need to Know About Becoming a Lender with Creative Financing

October 16, 2024 by Lisa Eagan

Creative financing can be an attractive option for sellers, especially those with significant equity. One popular approach is carrying back a second mortgage, where the seller effectively becomes a lender to help the buyer complete the purchase. While this can be a beneficial arrangement, it’s essential to understand the risks and the protections available, particularly regarding lender’s title insurance.

Why Consider Carrying Back a Second Mortgage?

Let’s say you own a home worth $150,000 that you’ve held for 15 years, and you have substantial equity built up. If you receive an offer from a buyer who can put down $20,000 and secure a $100,000 loan from a local lender, you might choose to finance the remaining $30,000. In this situation, you, as the seller, would be carrying back a note for that amount, essentially acting as a secondary lender.

Do You Need Lender’s Title Insurance?

Yes, you do. Anyone with an interest in a property, including sellers who carry back a second mortgage, should protect their investment with lender’s title insurance. By stepping into the role of a lender, you hold a record title interest in the property, which is worth safeguarding.

While your lien is secured by a recorded deed of trust, the lender’s title insurance offers a layer of protection against potential issues that could jeopardize your security interest in the property.

What Risks Does Lender’s Title Insurance Cover?

Financial institutions always secure title insurance to protect their investments, and as a seller-lender, you should do the same. Even if you know the property’s history and believe it’s free from issues like easements or boundary disputes, risks still exist—especially those related to human interactions and legal matters.

For instance, the buyer’s personal circumstances could impact your security. Events such as marriages, divorces, deaths, forged documents, money judgments, or unpaid state and federal taxes could affect the buyer’s ownership rights, making it challenging for you to collect your payments.

Example: Federal Tax Liens

A federal tax lien filed against your buyer before closing could wipe out your lien, leaving you without the security you thought you had. Experienced lenders are aware of such risks and use lender’s title insurance as a safeguard against these and other potential threats. Without this insurance, your investment could be at risk, even if your buyer appears financially stable and responsible.

Getting Facts About Lender’s Title Insurance

If you’re thinking about carrying back a second mortgage, make sure to gather all the information regarding lender’s title insurance. Your local title insurance company can explain the benefits and provide insights tailored to your situation. This protection can ensure that your investment remains secure, no matter what happens in the future.

Creative financing can be a powerful tool for sellers looking to close a deal and leverage their equity. It is crucial to approach this opportunity with the same caution that a financial institution would. Lender’s title insurance is not just an optional expense; it’s a smart investment in your financial future as a seller-lender.

What Buyers and Sellers Need to Know About Lead Poisoning

October 15, 2024 by Lisa Eagan

When it comes to buying or selling a home, there are many factors to consider, and one critical issue that sometimes gets overlooked is lead poisoning. Lead exposure, especially in older homes, can pose serious health risks to both children and adults. Here’s what you need to know as a buyer or seller and how it can impact your real estate transaction.

The Dangers of Lead Poisoning

Lead poisoning occurs when lead builds up in the body, often over months or years. It can lead to severe health problems, particularly for children, including:

Developmental Issues: High lead levels can affect brain development, leading to learning disabilities, behavioral issues, and slowed growth.
Hearing Problems: Exposure to lead may cause hearing difficulties in children.
Physical Symptoms in Adults: Adults can also experience complications, such as high blood pressure, muscle and joint pain, digestive issues, and memory or concentration problems.

Why Older Homes Are More at Risk

If you’re considering buying or selling a home built before 1978, it’s essential to be aware of potential lead hazards. Prior to 1978, lead-based paints were commonly used in residential properties. Over time, this paint can deteriorate, creating dust or chips that are harmful if inhaled or ingested.

Legal Requirements for Buyers and Sellers

To protect buyers, federal law mandates specific actions when selling homes built before 1978:

Disclosure Obligations: Sellers must provide any known information about lead-based paint hazards. This includes disclosing test results or past abatement efforts.
Federal Form Requirement: Sales contracts for older properties must include a federal form outlining information about lead-based paint. This ensures transparency and awareness.
Inspection Period: Buyers have up to 10 days to conduct a lead inspection or risk assessment. This is a crucial opportunity for buyers to negotiate repairs or mitigation efforts if hazards are found.

Protecting Your Family and Investment

For buyers, investing in an inspection is a smart move. Knowing the risks and any necessary remediation upfront helps you make an informed decision and potentially negotiate costs with the seller. For sellers, understanding and disclosing any lead-based paint hazards not only complies with federal regulations but also builds trust with potential buyers.

Whether you’re buying or selling a home, understanding the risks of lead poisoning and taking the proper steps can safeguard your health and investment. If you have questions about lead hazards or need guidance through the buying or selling process, reach out to your real estate agent. We’re here to help ensure you make informed, safe choices for you and your family.

What’s Ahead For Mortgage Rates This Week – October 14th, 2024

October 14, 2024 by Lisa Eagan

The CPI and PPI reports delivered their data, showing inflation figures slightly below expectations. However, the positive impact of these reports was tempered by hawkish comments from Federal Reserve members during recent meetings. Despite this, the overall outlook remains optimistic, as further rate cuts are anticipated. Lending partners have also responded positively, significantly lowering their lending rates over the past month.

Consumer Credit

Consumer credit increased by $8.9 billion in August, following a revised $26.6 billion surge in July, the Federal Reserve reported on Monday. This represents a 2.1% annual growth rate in August, a slowdown from the 6.3% rise in the previous month. Economists surveyed by The Wall Street Journal had expected a larger increase of $13.2 billion in August.

CPI

U.S. wholesale prices were unchanged in September, pointing to subdued inflation in the economy. This suggests that a bigger-than-expected increase in consumer prices last month is unlikely to last. Economists polled by the Wall Street Journal had forecast a 0.1% increase.

PPI

A key measure of consumer inflation increased slightly more than expected in September, which could complicate the Federal Reserve’s plan to cut U.S. interest rates twice more this year. The ‘core’ consumer price index, which excludes food and energy, rose by 0.3% for the second consecutive month, according to a government report on Thursday. Wall Street analysts had predicted a smaller increase of 0.2% for this core inflation measure.

Primary Mortgage Market Survey Index

15-Yr FRM rates saw an increase of 0.16% with the current rate at 5.41%
30-Yr FRM rates saw an increase of 0.20% with the current rate at 6.32%

MND Rate Index

30-Yr FHA rates saw a 0.08% increase for this week. Current rates at 6.12%
30-Yr VA rates saw a 0.07% increase for this week. Current rates at 6.13%

Jobless Claims

Initial Claims were reported to be 258,000 compared to the expected claims of 230,000. The prior week landed at 225,000.

What’s Ahead

There will be a very light week ahead after the release of the CPI and PPI reports, with only regular jobs data to note.

Advice on Downsizing or Upgrading Your Home

October 11, 2024 by Lisa Eagan

Whether you’re looking to downsize to a smaller space or upgrade to a larger home, both decisions come with their own set of considerations. Knowing the right timing, understanding the current market, and being well-prepared can make the transition smoother. Here are some insights to help you navigate either path with confidence:

1. Consider Timing and Market Conditions

Timing is crucial when deciding to downsize or upgrade. In a seller’s market, you might get a higher price for your current home, but finding a new home could be more competitive. In contrast, a buyer’s market offers more options and potentially lower prices, but selling your home may take longer. It’s essential to assess the local market conditions and understand how they impact your decision.

2. Evaluate Your Long-Term Needs

For those considering downsizing, think about how much space you’ll need now and in the future. Smaller homes often require less maintenance and are easier to manage, making them ideal for those entering retirement or seeking a simpler lifestyle. On the other hand, upgrading to a larger home is ideal for growing families or those wanting more space for home offices, hobbies, or guests. Carefully evaluate your needs and the long-term lifestyle you envision before making a decision.

3. Budget and Financial Planning

Both downsizing and upgrading come with costs beyond just the sale price of your home. Consider transaction fees, moving costs, and any necessary renovations to your new space. For those upgrading, factor in the increased costs of utilities, property taxes, and maintenance for a larger home. If downsizing, consider the financial benefits of having less upkeep and possibly a smaller mortgage or even paying off the home entirely.

4. Decluttering and Preparation

Downsizing often requires letting go of items you no longer need. Start decluttering early by sorting through your belongings and deciding what to sell, donate, or keep. This process can be emotional but is essential for transitioning to a smaller space. If you’re upgrading, consider what items you might need to purchase for your new home, such as additional furniture or decor, to fill the larger space appropriately.

5. Get Professional Guidance

Working with a knowledgeable real estate agent can make all the difference in ensuring a smooth transition, whether you’re downsizing or upgrading. They’ll help you assess the market, manage the logistics, and ensure you get the best possible outcome. With professional guidance, you can feel confident that the process is managed efficiently from start to finish.

Deciding to downsize or upgrade is a significant life choice that requires careful planning. By considering timing, market conditions, your long-term needs, and budgeting properly, you’ll be better equipped to make the right move for your lifestyle.

Select the Best Herbs for Your Organic Garden

October 10, 2024 by Lisa Eagan

Growing your herbs not only enhances your meals but also adds natural beauty to your garden. Whether you have a small balcony or a sprawling backyard, cultivating herbs offers a rewarding and sustainable way to enrich your home. Let’s explore how to select the best herbs for your garden, provide them with optimal growing conditions, and even harvest and preserve your bounty. Plus, you’ll learn how to create flavorful herb-infused vinegars to enjoy all year long!

Selecting the Best Herbs for Your Garden

When choosing herbs for your garden, it’s essential to consider your climate, soil type, and how much space you have. Here are some beginner-friendly options:

Basil: Ideal for warm climates and thrives in containers.
Mint: Grows rapidly, but it’s best to plant it in pots to avoid spreading.
Rosemary: A hardy herb that enjoys full sun and well-drained soil.
Thyme: Perfect for sunny areas, and it can handle poor, dry soils.
Parsley: A versatile herb that can grow in partial shade, making it a great option for less sunny spots.

Providing Optimal Growing Conditions

Each herb has its own specific needs, but some general tips can help ensure a thriving garden:

Soil: Herbs prefer well-drained, fertile soil. Add compost to enrich your soil before planting.
Sunlight: Most herbs thrive in full sun, which means at least six hours of sunlight per day. If you’re growing indoors, place your plants by a sunny window or use grow lights.
Watering: Keep the soil moist, but avoid overwatering. Herbs like rosemary and thyme prefer drier soil, while basil enjoys more consistent moisture.
Spacing: Allow enough space between plants to encourage healthy growth and prevent overcrowding, which can lead to disease.

Harvesting and Preserving Your Herbs

Harvesting your herbs at the right time is key to getting the best flavor:

Timing: Harvest herbs in the morning after the dew has dried but before the heat of the day. This is when the essential oils are at their peak.
Method: Use sharp scissors or garden shears to trim your herbs, and avoid removing more than a third of the plant at a time.
Preserving: You can dry your herbs by hanging them in a cool, dark place, or freeze them in ice cube trays with water or olive oil. These methods help maintain their flavor for months.

Creating Delicious Herb-Infused Vinegars

Herb-infused vinegars are a fun and easy way to extend the use of your garden herbs. Here’s a simple guide:

Ingredients: Use fresh herbs like basil, rosemary, thyme, or even a blend, and pair them with mild vinegar like white wine or apple cider vinegar.
Method: Lightly bruise your herbs to release their oils, place them in a sterilized glass jar, and fill them with vinegar. Seal and store in a cool, dark place for 2-4 weeks, shaking occasionally.
Usage: Strain the vinegar and store it in a clean bottle. Herb-infused vinegars make fantastic salad dressings, marinades, or gifts.

By choosing the right herbs, nurturing them with optimal growing conditions, and learning how to harvest and preserve them, you’re setting yourself up for a successful organic garden. Whether you’re interested in fresh herbs for cooking or homemade vinegar, a well-tended herb garden brings a touch of nature into your home.

First-Time Homebuyer Checklist for Success When Embarking on the homebuying journey

October 9, 2024 by Lisa Eagan

Purchasing your first home is an exciting milestone, but it can also feel overwhelming without a clear plan. With so many moving parts, from financial prep to evaluating potential homes, having a comprehensive checklist can help simplify the process. Here’s everything you need to consider to make your home-buying journey smoother and more successful:

1. Get Your Finances in Order

Check Your Credit Score: Lenders rely heavily on your credit score. Aim for a score of 620 or higher to qualify for a conventional loan, though some programs accept lower scores.
Save for a Down Payment: Depending on the type of loan, you may need anywhere from 3% to 20% of the home’s price. Be sure to budget for closing costs and emergency funds.
Get Pre-Approved: A pre-approval letter strengthens your position when making offers. It shows sellers you’re serious and capable of securing financing.
Consider First-Time Buyer Programs: Look into local, state, or national programs designed to assist first-time homebuyers with down payments, tax credits, or low-interest loans.

2. Determine Your Budget

Know Your Monthly Budget: Factor in mortgage payments, taxes, insurance, and potential maintenance costs. Leave room for unexpected expenses!
Factor in the Long-Term: Think about future life changes—do you plan to expand your family? Relocate for a job? Buy with a forward-looking approach.

3. Start the Home Search

List Your Must-Haves vs. Nice-to-Haves: Prioritize things like location, the number of bedrooms, and school district over less critical features like a pool or finished basement.
Work With a Real Estate Agent: Partner with an agent who understands your needs and local market trends, providing valuable insights and helping you find the best options within your budget.

4. Visit Properties & Make a Decision

Attend Open Houses and Viewings: Bring a checklist of what to look for—condition of the roof, HVAC system, foundation, and neighborhood noise levels. Take photos and notes for future reference.
Ask Questions: What’s included in the sale? How old are the appliances? What’s the community like? Knowing the details can help you avoid future surprises.
Look Beyond the Surface: Fresh paint may hide issues. Inspect areas like the basement, attic, and behind large appliances for potential red flags.

5. Seal the Deal

Make an Offer: Your agent will help you craft a strong offer based on comparable properties and market conditions. Be prepared to negotiate!
Schedule an Inspection: A home inspection ensures the property is in good condition. If issues arise, you can request repairs or adjust the offer accordingly.
Close the Deal: Once everything checks out, you’ll finalize your mortgage, sign the paperwork, and receive the keys to your new home! Buying your first home can feel daunting, but by following this checklist, you’ll have the confidence to make informed decisions at every step. As your trusted real estate agent, I’m here to guide you through the entire process, ensuring a smooth transition into homeownership.