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Fournier Law Blog

Intelligent legal insight from our team of experienced attorneys.

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Chicagoland Real Estate: Which Area’s Home Sales are Most Improved?

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Some promising real estate sales information for Chicago and its surrounding suburb’s was released by Crain’s recently.   The analysis included the actual number of homes sold, the median price of the homes that sold and the average time to sell compared to those same statistics from quarter one of 2016.

Rising to the top of the list for single family homes sold in Chicago was the Irving Park neighborhood.  According to the article in Crain’s, written by Dennis Rodkin, “Irving Park’s volume of sales is up 6.6 percent, to 66 sales, and the median price sale price rose 8.6 percent, to $505,000. Houses sold 14 percent faster than a year ago, in an average of 102 days.”

Suburbs such as Glendale Heights, Oak Lawn and Joliet reported impressive increase in homes sales, significant rise in median price and a marked decrease in the time the homes spent on the market before receiving an offer.  Specifically, Glendale Heights’ sales increased 4.8 percent and the median price rose 9.4 percent compared to the first quarter of 2016.

Read the entire article to see sales data for other Chicago neighborhoods and suburbs showing growth and improvement from last year.

 

 

 

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Homes Sales Data So Far This Spring: Good News for Sellers

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As the season of spring begins to bloom all around us, so it goes for the spring real estate market.  Many homeowners see spring as the perfect time to put their homes up for sale.  As prospective home buyers begin their search for their first or next home, they may find that homes aren’t sitting on the market nearly as long as they have been in the past several months.

A recent report provided by a national real estate firm, Redfin, indicates that despite the fact the number of homes for sale has dipped 13 percent from last year at this time, actual home sales has surged 9 percent.  Additionally, the number of days until the average home goes under contract has decreased by 11 days since last March, dropping to just 49 days.  Lower inventory and fast paced home sales has also driven up the prices of home an average of 7.5 percent.

A CNBC article written by Diana Olick, goes on to detail that not only homeowners are benefiting from a spring jump start.  Builders are also tracking a home sales increase of 6.7 percent from last year.  However, new home prices have remained virtually unchanged.  Olick suggests, this “…may indicate builders are trying to keep prices down in order to get more buyers in the door.”

Home buyers are looking to take advantage of the low mortgage rates and their desire to close the deal has resulted in some very favorable news for those looking to sell their homes.

Read the entire article.

 

 

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Thinking of Flipping A House? Review These Helpful Tips

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The home improvement shows make it look so easy.  It appears that as long as you can find an old, run-down house, you can spend a few weeks renovating it and list it for a profit.  Many people realize, however, it is usually not that easy.  Nevertheless, there is a market for flipping renovated homes and flipping these home can be profitable.

It is important, though, to understand the ins and outs of purchasing an old, dilapidated home and attempting to fix it up for resale.  In an article published by Realtor.com, writer Lisa Gordon lists many of common mistakes made by first time home flippers.

For example, it might be tempting to purchase a home “as is” without getting a home inspection since the plan is to fix it up anyway.  However, the home inspection will not only help identify major issues that could turn your flip into a money pit; it might also provide some bargaining power on the purchase price.

Gordon goes on to list additional mistakes such as “Overestimating your renovation skills” and “Underestimating total costs”.  You may feel it will be easy enough to do all of the work on your own, in order to save money; yet, the article warns,  it might be well worth the extra cost to hire professionals for some of the plumbing or carpentry projects.

Read the entire article.

 

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Good News About Credit Reporting and Credit Scores

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Come this July, you may see a boost in your credit score.  The three major U.S. personal credit monitoring firms, Experian, TransUnion and Equifax, will be removing some borrowers’ civil judgement and tax lien information from their credit reports.

According to an article published by Fortune.com, written by Kevin Lui, since 2015, these credit reporting firms have been working to correct credit reporting mistakes and removing information unrelated to the borrower’s loan application by omitting information deemed unnecessary to lending.  In fact, according the article, “…in 2011 alone, 8 million complaints about wrong information in credit reports were received by the three major credit-reporting firms, according to the CFPB”.

This latest announcement could result in some borrower’s credit scores increasing by up to 20 points.  An increase in a credit score can increase the likelihood of securing a loan and is also helpful when applying to rent a home and even can affect future employment opportunities.

Read the entire article.

 

 

 

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Will the Fed Rate Increase Affect the Spring Housing Market?

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On Wednesday, the Federal Reserve governors decided to increase the interest rate by .25 percent.  According to an article written by Amber Tuaufen, published by inman.com, “The Federal Reserve sets the rate for the overnight exchange of money by banks; governors adjust the rate to help curb inflation or stimulate growth, depending on their assessment of what would be best for the economy.”

Despite the fact that this move does not directly affect the mortgage rates, it can have an impact on the rates for mortgages.  In fact, an increase in mortgage rates has been anticipated for quite some time now.  Many prospective home buyers have been advised that the historically low interest rates were coming to an end; however, rates continued remain low.  Many buyers may not have felt pressure to move forward with a home purchase, leading to sluggish sales.  It would appear, now, the rates are indeed going to begin to increase.

This potential increase of mortgage rates could have some negative impact on home sales.  Yet, some agents feel that the continued affordability of housing coupled with the steady increase of rates could put pressure on prospective home buyers to make a decision and not delay their home purchase any longer.

Read the entire article.

 

 

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Working From Home May Provide Tax Benefits

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Working from home a few days a week or even full time has become a more popular option and benefit offered by employers.  Not only does it allow for flexibility in the work day, it can help save money normally spent on commuting costs, eating out, and wardrobe purchases, to name a few.  Another cost saving measure can come in the form of a tax write off, the Home Office Tax Deduction.

According to an article written by Margaret Heidenry published by realtor.com, “the home office deduction allows you to write off part of your home expenses on your business tax return by separating out the costs associated with using your home for personal purposes (making pancakes) and business (answering work email).”  It is important to understand, however, if your work from home situation actually qualifies for a home office write off.

First off, the “home office” has to be an area of your home used solely for the purpose of conducting the work associated with the business.  It cannot be used for any other functions unrelated to the employee’s work and still qualify for the deduction.  It is also required that the work from home arrangement be in place in order to provide convenience to the employer, not simply a preference of the employee.  An example of this would be if the employer did not have a physical office space for the employee to work from.  If these qualifications are met, claiming the home office on your taxes can be completed via a couple different methods detailed by Heidenry’s article.

Read the entire article.

 

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Building Wealth: An Unmistakable Benefit of Buying a Home

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When deciding to buy a home or rent a home, the lists of pros and cons for buying or renting can be overwhelming.  Depending on the current market conditions, it may seem obvious which choice is more economical.  When rates are low and prices are low, buying a home appears to be the best choice.  However, as mortgage rates and housing prices begin to increase, renting a home is an option that might seem more economical.

However, an important factor should be considered before deciding to rent instead of buy, even as mortgage rates increase and home values begin to rise.  According to an article published by Realtor.com, The Misleading Math Behind the Rent vs. Buy Calculation, “…homeownership is a critical building block of household wealth. Owning a home is a key reason why the median net worth of a homeowner is almost $200,000 while the median net worth of a renting household is just over $5,000.”

A closer look at the comparisons between the cost of buying versus renting reveal some long term advantages to owning a home and uncover some details worth considering.  It is common knowledge that part of each monthly payment go toward the equity a homeowner has in their property with a fixed 30 year mortgage. Additonally, as the home owner gets further into the lifetime of the mortgage, the amount they are paying into their own equity begins to increase. An important detail to note, which may not be a common consideration, is that the payment amounts are actually “frozen” for the lifetime of the mortgage.  It is unlikely that a renter could expect such a guarantee.

Homeowners know what their housing payment will be for the next 360 months, not many landlords are willing to lock their monthly rental rate beyond a year or two.  Further, homeowners are, in essence, locked into a “forced savings plan” where they pay some percentage to their own equity each month. This reason, alone, is the primary factor which makes it more feasible for homeowners to accumulate wealth.

Read the entire article. 

 

 

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Are You Sure Your Mortgage Interest Is Tax Deductible?

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As you prepare your taxes this year, you may or may not notice a re-designed form 1098, the form used to report the amount you paid in mortgage interest for the tax year.  Although there have not been any changes made to the mortgage interest deduction regulations in several years, in 2015 the U.S. Congress did pass new rules with regard to how mortgage interest is reported.  The form now requires more details to ensure homeowners’ properties and mortgages indeed qualify.

According to an article published by Kiplinger, titled Mortgage Interest Tax Deductions May Get Extra Scrutiny This Year, “The new form will include the mortgage origination date, the balance at the end of last year and the address of the property securing the loan, as well as other information useful to the IRS.”  As a result, we could see the IRS perform more audits that specifically focus on mortgage interest.

Therefore, it is important for homeowners to have a clear understanding of what properties qualify for mortgage interest deductions as well as how much and what kind of debt falls within the IRS guidelines before filing your taxes this year.

The Kiplinger article provides specific details and helpful examples, click here to read the entire article.

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Single Women Outpace Single Men in Home Ownership Trends

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Since 1981, single women have lead single men in the category of home ownership.  Over the past few years, the gap has grown even larger.  According to a data released by the National Association or Realtors, in 2016, single women accounted for 17 percent of the US. homeowners.  Single men lagged behind,  making up only 7 percent of all American homeowners.

According to an article published by Bloomberg.com, “Women earn less than their male counterparts, pay harsher workplace penalties for pursuing parenthood, struggle more with debt, and save less for retirement.”  Nevertheless, the rate at which women purchase homes outpaces single men.  This begs, the question, why?

The most prominent reason, Mary Pilon points out in her article, “Why Single Women Are Buying Homes at Twice the Rate of Single Men”,  is that a woman, as a single mother, places significant value in providing a stable home for her child.  Since women are three times more likely, than a man, to be the single parent, the number of homes purchased by a single parent will most likely be a single mother.FotoFlexer_Photo

Additionally, there are more and more unmarried Americans 25 years old or older; in fact about 20 percent of Americans over the age of 25 are single.  According to Bella DePaulo, a professor at the University of California at Santa Barbara, women seem to embrace their single lifestyles more readily than single men.  Owning their own home is a way many single women choose to enjoy their years as single professionals; they truly revel in the independence and empowerment home ownership represents.

Read the entire article.

 

 

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Why are Du Page County Home Values Declining?

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A recent report released by the Du Page Policy Journal at the end of January pointed to some alarming statistics about the value of homes in Du Page county.   According to the report, in the past decade, home values in Du Page county have seen a decrease of just over 11%.  Home values in suburbs such as Hinsdale and Elmhurst have dropped approximately 25 percent since 2007.  Worse yet, homes in Willowbrook are down 48 percent from values ten years ago. An article published in the Downers Grove Patch details the home value decreases of many Du Page County towns and villages.  The article, written by Anicka Slachta, goes on to project what the next few years could look like for home values in this area of Illinois.FotoFlexer_Photo

These numbers can be unsettling to home owners, especially considering favorable mortgage rates home buyers have been able to secure recently, which normally helps drive up home values.  However, there is an obvious culprit behind these decreased home values.  As homeowners in these suburbs can attest, there has been a significant increase in government spending and taxes increases brought on by school tax levies and city debts.  As the homeowner rate taxes increase in these towns, the values of the property fall.

Read the entire article.

 

 

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