Your 2023 Moving Guide: Options for Simultaneously Buying and Selling

There are plenty of good reasons you might be ready to move. No matter your motivations, before you list your current house, you need to consider where you’ll go next. In today’s market, it makes sense to explore all your options. That includes both homes that have been lived in before as well as newly built ones. To help you decide which is right for you, let’s compare the benefits of each. Regardless of which option you choose to explore, working with a trusted real estate professional throughout the process is essential.   The Benefits of Newly Built Homes First, let’s look at the benefits of purchasing a newly constructed home. With a brand-new house, you’ll be able to:   1. Build your dream home If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more. Bankrate puts it like this: “Building means customizing. . . . instead of wishing your home had a certain kind of flooring, a sunroom or some other special amenity, you’ll be able to tailor the property to your exact needs. You also won’t be limited to a specific location or neighborhood.”   2. Take advantage of builder concessions In today’s market, a lot of home builders are working hard to sell their current inventory before they add more to their mix. That means many of them are offering concessions and are more willing to negotiate with buyers. That could work to your advantage in the process.   3. Minimize home repairs Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little improvement projects to tackle. As realtor.com says: “. . . if something goes wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties . . .”   4. Take advantage of energy efficiency When building a home, you can choose brand-new, energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.   The Benefits of Existing Homes Now, let’s compare those to the perks that come with buying an existing home. With a pre-existing home, you can:   1. Explore a wider variety of home styles and floorplans With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.   2. Appreciate that lived-in charm The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.   3. Join an established neighborhood Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit. Plus, they have more developed landscaping and trees, which can give you additional privacy and curb appeal.   4. Move in faster If you have a short timeframe to move or you just don’t want the process to take several months while your home is under construction, buying an existing home might make sense for you. U.S. News explains: “When you’re choosing a home, existing or new, you should also consider how long it might take to move into that home. Just because you have a contract doesn’t mean that your new home will be completed (or even started) at the time you agree to the purchase. It can be a struggle waiting for the walls to go up as you wonder what your home will become.”   When thinking about where you’ll go after you sell your house, remember your options. As you start your search, think about what’s most important to you. By working with a trusted real estate agent, you can be confident you’re making the most educated, informed decision.   If you have questions about the options in your area, meet with a local real estate professional to discuss what's available and what's right for you.

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Housing Market Bounces Back as Mortgage Demand Rises with Falling Interest Rates

As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.   Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.    So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.   Mike Fratantoni, SVP and Chief Economist, MBA: “Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”   Lawrence Yun, Chief Economist, National Association of Realtors (NAR): “The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”   Thomas LaSalvia, Senior Economist, Moody’s Analytics: “We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.”   Sam Khater, Chief Economist, Freddie Mac: “Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”   If you’ve been thinking about making a move, now’s the time to get your house ready to sell. Contact a local real estate professional to learn about buyer demand in your area and the best time to put your house on the market.

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Don't Miss These Tax Credits and Deductions in 2023: Homeowner Tax Breaks That Will Save You Money

Are you a property owner looking for ways to reduce your annual tax burden? These homeowner tax incentives can help lower your taxable income and result in huge savings when filing. In this article, we’ll discuss the most common homeowner tax incentives that could benefit you this year.   Homeowner tax breaks that will save you money   The interest you paid on your mortgage For homeowners who itemize, the interest paid on your mortgage is usually a pretty hefty tax deduction. This amount depends on when you took out your loan: if it was after Dec. 16, 2017, you can deduct up to $750,000 (or up to $375,000 if married and filing separately); for loans taken out between Oct. 14, 1987, and Dec. 15, 2017, you can deduct up to $1 million ($500,000 if married and filing separately); and for refinanced mortgages, the limit depends on the origination date of your first loan. All interest may be deductible if your loan predates Oct. 14th, 1987.   What you paid for discount points If you’re within the limit to deduct all your mortgage interest, you may also deduct the discount points you paid when the loan closed. Discount points can lower the mortgage's interest rate and cost 1% of the total mortgage amount. It is important to note that there are other types of fees called "loan origination points" which do not qualify for a deduction—instead, these go toward covering lenders' costs in providing loans.   Some renovation costs—especially medically-necessary improvements When determining your medical expense deductions, you may include the cost of installing healthcare equipment or other medically-required home improvements that benefit you and your household. However, permanent improvements that increase the value of your home are only partially deductible; the amount must be subtracted from your increased property value. In contrast, many modifications that make a home more accessible (building entrance ramps, wide doorways, railings, and support bars) do not raise a property’s worth and can be fully deducted.   Home office expenses If you’re self-employed and use part of your home regularly and exclusively for business purposes, you may be eligible to deduct home office expenses. The IRS website provides information on how to determine if your space qualifies for a tax deduction as well as worksheets for calculating the amount. You can choose either the "simplified method" or calculate your actual expenses when figuring out the deduction.   Property taxes You may deduct a maximum of $10,000 ($5,000 if married and filing separately) for the combination of property taxes, state, and local income taxes, or sales taxes when filing your personal income taxes.   What you need to know about multi-family residence deductions People who purchase and operate rental properties can take advantage of various tax deductions that differ from those available for a primary residence owned by the homeowner.  These include: Asset depreciation Depreciation is a unique tax benefit of rental property. According to the Internal Revenue Service (IRS), residential property has a depreciable lifespan of 27.5 years, while non-residential real estate has a depreciable lifespan of 39 years. This allowance is provided for expected wear and tear or obsolescence when owning the property over time. Furthermore, larger purchases like appliances or furniture may also be depreciated by owners over the item’s lifetime.   Repairs Repairs to rental properties are generally deductible on tax returns. This includes fixing a broken banister or replacing a damaged garage door. However, upgrades and improvements such as adding a new shed or remodeling a bathroom are not considered repairs, but they can be depreciated over the useful life of the property. If you provide tenants with rental credits in exchange for performing repairs, this credit can also be deducted as an expense even though it will be considered income.   Operating expenses Expenses related to tenant screening, such as background checks, credit reports, and reference checks are generally deductible. Other costs associated with the upkeep of the property or landlord-paid utilities may also be eligible for deduction. These expenses can include lawn care, painting, appliance maintenance and repairs, carpet cleaning, pest control, and seasonal maintenance (gutter cleanings, tree pruning, snow removal, etc.) as well as your Homeowners' Association dues.   Is it worth the trouble to claim these tax breaks? For homeowners, tax deductions can amount to thousands of dollars. However, it is only worth itemizing if the sum of all your deductions exceeds the Internal Revenue Service's (IRS) standard deduction for the 2022 tax year. The standard deduction amounts are as follows: $25,900 for married couples filing jointly; $12,950 for single filers and married individuals filing separately; and $19,400 for heads of households.

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