Home Ownership

What To Do When Your Property Tax Appraisal Jumps

Homeowners across the country are getting a shock when they open their 2022 property tax appraisal notices. These appraisals are often far higher than they were only a year ago. What will these higher appraisals mean for property taxes in the future? What can you do if you think your appraisal is too high?...

Lull before the storm

Even during the pandemic, home sales across the nation stayed strong. The limited inventory of homes for sale was overwhelmed by a crowded market of buyers, bidding prices skyward. ...

Appraisal districts lagged behind this rising curve. Appraisal districts use comparable sold prices over the previous six to twelve months to determine values. In locales where appraisal districts conducted annual valuations early in 2021, that year’s property tax appraisals didn’t reflect much of 2021’s rapid run-up of home prices. Those value increases are now being reflected in 2022 property tax appraisals. ...

The Federal Reserve has raised interest rates three times through June 2022, and home sales are slowing. This may bring prices back down to earth, which would cause appraisals in 2023 to level off or even decline slightly. County and state government operating costs do not decrease, however, so these entities may raise tax rates if valuations are down....

Tax caps

Just because your property appraisal spikes by 50 percent does not mean your taxes owed will rise that much. Almost every state has a property tax cap that sets a maximum percentage that taxes can increase in a year on an owner’s homestead. (These caps usually do not apply to investment properties.) Every state has its own laws, but maximum increases of between 3 and 10 percent are standard across the country. ...

States also have caps designed to protect certain groups, such as people over 65 and veterans....

Protest a property tax appraisal

You as a taxpayer have the right to protest your property tax appraisal. Unless you believe the assessment is reasonable or even undervalues what you think your property is worth, you should take advantage of this right. The appraisal notice you receive will contain a form explaining how to file a protest....

You cannot base your protest on vague claims of an unfair increase. Instead, back your claim that the appraisal is too high with documentation of comparable sold prices for your area. ...

You can hire a professional protest firm to challenge your property tax appraisal for you. Usually, you pay these firms a percentage of the amount you save in taxes. If the firm fails to cut your tax bill, you pay nothing....

Related – Understanding Your Property Taxes...

Home Improvements, Money, Ownership, Saving Tips, Selling, Selling Your Home,

Show Me the Money: Home Remodeling that Pays Off

If you’re talking about a potential home renovation project, it’s important to know if the money you put into the project will translate into more money down the road when, or if, you sell your house. Some projects will pay off handsomely while others will not. And, sometimes, it’s how you do the project that makes the difference....

Do you DIY? One of the keys to making a remodel or renovation project pay off later is keeping costs down. For most homeowners, this means doing the project themselves. Hiring a contractor means paying for labor and markups on materials. The question is, can you do the project yourself? Does it require special skills and tools?...

Today, the greatest resources available for DIY projects are Youtube and Vimeo. Search their databases for the DIY project at hand and you are almost assured of finding the right videos. Detailed tutorials on laying tile, refinishing cabinets, painting techniques — you name it — can all be found online. For special tools you may need, check with the rental department of your local home improvement store. Don’t buy expensive tools you may only use once....

With that in mind, let’s look at several projects you can probably do yourself and reap the rewards when it comes time to sell....

Updating your kitchen. The kitchen is the most popular choice for a remodeling job. It can also be one of the most expensive, but it doesn’t have to be. While gutting a kitchen would most likely involve hiring a contractor, modest upgrades can be handled by many a DIY-er. With the help of online videos and rented tools, homeowners can sand and refinish cabinet facings and doors, re-tile floors and back splashes, replace sinks and faucets, and install new appliances. Doing it yourself translates into a much bigger payoff at resale.
Freshening up bathrooms. Do-it-your-selfers will likely reap a good return on a bathroom project by refinishing cabinets and tearing out old tile floors and replacing them with a fresh new look. Replacing tile in a shower is a little trickier, however. New fixtures and fresh paint are also well within the repertoire of a DIY-er.
Improve curb appeal. Replace overgrown shrubbery, trim trees, weed flower beds and reseed your lawn. Seek help from a landscape design specialist at a local home improvement store, regarding plant choices and proper placement. Fresh paint or power washing, shutters, a new front door, or a new garage door are all modest investments that could also pay off big later.
Energy efficiency projects. Improving energy efficiency by adding attic insulation, re-caulking windows, installing a programmable thermostat, installing low flush toilets and low volume shower faucet heads are all examples of modest home-improvement projects that will pay off handsomely when you sell your home. They will also slowly pay for themselves through monthly utility savings.

Selling, Selling Your Home,

When a House Sells, What Stays and What Goes?

When a home seller and a buyer come to an agreement on a sale, more than just the house and land are involved. Misunderstandings sometimes arise over elements of the home that the buyer thought were staying and the sellers intended to take with them. These decisions revolve around three legal concepts: real property, personal property and fixtures. What do they mean and why do they matter to you?...

Defining the three terms....

Real property is the most fundamental concept in real estate law. Real property in most states is defined as land and structures affixed to it. The things attached to the land are immovable including landscaping such as trees and turf. This is the primary property that is bought and sold in a real estate transaction and is transferred by a deed.
Personal property is movable and is the kind of thing you expect the seller to be taking with them such as furniture, tools, automobiles and the like.
Fixtures are personal property that an owner attaches to the real property in a permanent way. However, “permanent” can be a little gray in some cases. Usually, if something is bolted to a wall, floor, cabinet or counter, it is considered a fixture, but sometimes sellers want to take such items. This is where disputes arise.

Make sure everything is clear. Appliances such as built-in microwaves and sink disposers are fixtures because they are bolted to the property. But a refrigerator can be unplugged and taken. Technically, a drop-in stove could be moved, but it would be unusual. Attached shelving which was added after the house was built is a fixture. A decorative mirror that is bolted to a wall would be considered a fixture, especially if removal would damage the wall. However, it may be of value to the owner, in which case the seller would need to repair any wall damage....

For any items that are not clear, the best way to know what stays and goes is for the buyers to ask the sellers for anything they are interested in keeping. Any items that are determined to stay with the home for the new buyer are said to “convey” in the transaction. Once the buyer and seller reach an agreement, those terms should be clearly spelled out in the sales contract. Any agreed upon personal property will be transferred to the new owner via a bill of sale....

After the closing, any property left in the house, including personal property the seller intended to take but overlooked, no longer belongs to the seller. Any such fixtures are considered part of the real property, and any personal property is considered abandoned by the seller....

Home Energy, Ownership,

How to Safely Shut Off Your Utilities

You may need to shut off your home’s utilities in the event of a repair, suspected leak or an emergency. Here’s what you need to know about shutting off utilities safely....

Cutting the water supply

The main water valve is adjacent to the water meter, often in the same valve box in the ground. The valve may have a rubber-coated handle. The valve is open when the handle is turned parallel to the supply line. To cut the water, turn the valve perpendicular to the line. ...

Turning the water back on can cause a pressure leak. To avoid that, before restoring the water, open a few faucets around the house so that air trapped in the plumbing can be pushed out of the lines. Then, gradually open the valve for a minute or two....

Safety tip: Before reaching into the valve box in the ground, look inside to ensure some creature like a snake, rodent, or spider hasn’t made a cozy home inside. It would even be wise to put on a protective glove. ...

Cutting the electricity

Locate your circuit breaker box. This box is often next to the utility meter on an outside wall but can also be in the home or basement. The main breakers are two large switches at the top, with two columns of smaller sub-breakers below that connect to specific systems such as the air conditioner, water heater, lights and electric sockets. ...

To cut power to those specific systems, use those smaller switches. To shut down the whole house, shut off each sub-breaker and then the main two breakers....

Reverse this process to restore power. Turn the main breakers on first, then turn the sub-breakers back on one by one. This avoids sending a surge of electricity to all systems at once. ...

Cutting the gas

Dealing with gas is a different situation that requires extra caution. You should rarely if ever have to cut off gas. A construction project or an emergency such as an earthquake are the only exceptions. It is best to call a plumber or the gas company to shut off the gas. If you must do so yourself, always notify the gas company to send a technician to restore service and check for leaks....

The cut-off to the gas supply is typically on a pipe rising from the ground and leading to the meter. The valve has a rectangular tab about a half-inch thick by one-and-a-half inches wide. Less frequently, there may be a ball valve with a rubber-coated handle. When the valve handle is in line with the supply pipe, the valve is open and gas flows. Turning it perpendicular to the line cuts the gas. ...

If you smell gas in your home, leave the house immediately and call the gas company. Do not attempt to cut the gas off yourself. Leave the door open to vent some of the gas buildup. Do not turn on or off any light switches, which could ignite the gas....

Related – Circuit Breaker Basics...

Ownership, Shopping Guides,

Watch Out for Hidden “Junk Fees” Draining Your Wallet

So-called “junk fees” – also known as service charges, termination fees, convenience fees and administrative costs – can take you by surprise, turning a good deal into a ripoff. While the federal government has recently taken aim at such fees, it’s up to you, the consumer, to read the fine print and beware of hidden charges. Here are a few tips....

Where to look for junk fees

Hidden fees are often buried in the tiny type of an agreement. Many show up at the end of the transaction. ...

Service charges are tacked onto the advertised price. Essentially, the company hides the actual price of the good or service by offering a discount, then regaining the real cost with added fees.
A package of additional products or services the consumer didn’t ask for is “already installed” and cannot be removed. Car dealerships are prone to this.
Early termination fees if a consumer isn’t satisfied with the service and cancels.
Airlines may charge extra for luggage, seat assignments, food and other amenities once considered part of the regular ticket price.

What you can do about hidden fees

Research companies before hiring them. Check online reviews but be savvy about it. A 5-star average on 400 reviews means something, but a 5-star review from a handful of customers doesn’t hold as much weight.
When negotiating with a salesperson for a product or service, ask for a complete list of fees, taxes and service charges that will be added on to the advertised price.
Challenge any surprises and be willing to walk away from the deal. The prospect of losing the deal often motivates a seller to waive some charges.
After the salesperson gives you a final price, carefully read the agreement before authorizing it. Don’t be hurried into signing before reading the fine print.

After the agreement

Keep your records. If the agreement is signed digitally, request a digital copy and file it for safekeeping. ...

With any monthly service, such as cable or cell phone coverage, read your bill each month to ensure you didn’t miss anything during the sales process. Call customer service and dispute any surprises. ...

When you have a complaint

Contact the vendor and request a financial remedy. If that doesn’t work, ask to speak with a supervisor. Always maintain your composure. Finally, document your conversations, including names and dates. ...

If these steps don’t work, go outside the organization. The Better Business Bureau, the consumer arm of your state attorney general’s office or a state agency that regulates the business in question are all potential resources. ...

For example, if you file a complaint with the BBB, the organization will contact the business and seek to mediate a settlement. Cooperate with that process. If the offending business makes a reasonable effort to work with you, even if it means a compromise agreement, the BBB will note that for future consumers visiting its site. The complaint history is on the BBB site for future consumers to see. ...

The Federal Trade Commission, which is currently working on making it easier to cancel monthly subscription services, also offers tips, sample complaint letters, and other ideas on handling problematic businesses....

Outdoor Living, Ownership,

Common Tree Diseases: How to Identify, Treat, and Prevent Tree Diseases

Keeping your property healthy is important, and watching for signs of tree diseases is essential. Trees offer a majestic presence in our landscape, and healthy trees represent 5%-20% of a home’s value. Here is a basic primer on tree diseases....

Four ways tree diseases attack the landscape

Like the human body, a tree can be attacked by different diseases. ...

Diseases can attack a tree’s foliage, its leaves or needles, harming respiration and photosynthesis.
Diseases can attack a tree’s bark and wood.
Diseases can attack the tree’s root system, affecting water and nutrient uptake.
Finally, disease can affect a tree’s vascular system, much like arterial disease in humans affects blood circulation.

Examples of tree diseases in each system

Among diseases that affect a tree’s foliage, powdery mildew and anthracnose can be managed both by pruning to improve air circulation and by applying fungicides. Pines and other needle species can develop blights and casts caused by fungal pathogens, which require fungicide treatment followed by reduced watering.
Diseases of the bark and wood often take the form of cankers, such as aspen canker, Thyronectria canker, and chestnut blight. Treat with proper fertilization and by pruning away diseased branches.
Examples of systemic and vascular diseases include oak wilt and Dutch elm disease, which can be managed by avoiding pruning during certain times of year, spraying for bark beetles, and removing diseased trees to help isolate the disease from others.
Finally, root diseases are characterized by poor growth and wilted leaves despite good watering. Examples are Armillaria root rot and Heterobasidion annosum root rot. Treat by aerating the soil and, in some cases, with fungicides.

Investment, Money,

Comparing Wills and Trusts: Which Do You Need?

Proper estate planning can be a dreaded task but think of it as a gift to your heirs. Two primary legal entities are used in estate planning: wills and trusts. This summary provides a general comparison. Please consult an estate-planning attorney and financial adviser on your specific situation....

Basics of wills

A will is a legal document that directs how someone wants his or her assets handled upon death and who should be the guardian of minor children or other dependent persons. A will becomes effective when the author of the will, known as the testator, dies....

For a will to be valid, the testator must be an adult of sound mind acting freely and independently. It must be signed by the testator and witnessed by other adults. The number of witnesses varies by state....

If a person dies without a will, he or she is said to die intestate. In that case, a court determines the disposition of the assets and the guardianship of minors under that particular state’s laws....

A will designates a person as executor or executrix of the estate to carry out the terms of the will. The estate enters a legal process called probate in which the assets and guardianships are executed. Probate can be a lengthy and costly process....

Types of wills include:...

A simple will, also known as a testamentary will, designates the distribution of assets and guardianship of minors.
The most common example of a joint will is the will of a husband and wife. With this type of will, the spouses designate each other, as the surviving spouse, as full heir.
A pour-over will designates assets that have yet to be titled to a trust to become so upon the person’s death.

Basics of trusts

A trust is both a legal and a fiduciary arrangement for the holding and management of assets of an estate for the benefit of its creator, known as the grantor, and any third parties named by the grantor. It is created while the grantor is still living and assets are placed in the trust. Once assets are placed in the trust, it becomes effective. Assets can include real estate, bank and securities accounts and other valuable assets. The grantor sets requirements for how assets are to be distributed upon their death. The grantor usually designates a person known as a trustee to manage the trust assets if the grantor becomes incapacitated....

Assets that designate beneficiaries, such as IRA and 401K accounts, as well as life insurance payouts, bypass probate and trusts and are independent of them since a beneficiary is named while the owner is still alive. The same applies to financial assets set up as “Joint Tenancy with Right of Survivorship” or JTROS accounts. ...

A trust cannot designate guardianship, which can only be done with a will. Thus, trusts are often set up in combination with a will....

Types of trusts include:...

A living, inter vivos, revocable, or revocable living trust allows the grantor to title assets to the trust and designate a trustee while the grantor is still living. It can be changed and updated throughout the grantor’s lifetime.
A testamentary trust is named in a will and is created upon the testator’s death. It can hold assets payable to the heirs under conditions set by the testator, such as upon children reaching a certain age.
Irrevocable trusts are used to place assets of high-net-worth grantors to avoid estate taxes.
Charitable trusts designate that property in the trust is given to a charitable cause upon the grantor’s death. This fulfills the grantor’s wishes to benefit the cause and avoids taxation of the assets.

Comparing wills and trusts

Living trusts are created and your wishes established while you are still living, whereas a will takes effect upon your death. Only a testamentary trust becomes effective upon your death.
Assets under a will can languish in legal limbo, leaving heirs waiting for probate to conclude. The terms and outcomes are public information. Assets held in a trust are available to heirs without going through probate according to the terms created by the grantor, and the information is private.
Assets in a living revocable trust are still considered owned by the grantor. Assets under an irrevocable trust are out of the grantor’s name. As such, irrevocable trusts shield assets from creditors. Revocable living trusts do not.
The preceding conditions protect a large estate from estate taxes under an irrevocable trust.
Guardianship of minors must be designated in a will.
Wills are afforded secondary consideration to trusts due to the ongoing nature of trusts.

Related – Can You Disclaim an Inheritance?...

Insurance, Money,

Homeowners’ Insurance Costs Are on the Rise

It’s tough to get a break on homeowners’ insurance costs. During the pandemic, prices soared as home listings were in short supply. Inflation and supply chain issues pushed up building costs. Now, insurance rates are skyrocketing. What is causing this upward trend?...

Homeowners’ insurance costs are breaking the bank.

Why do homeowners’ insurance costs keep rising? Several factors have come together to create the perfect storm, literally:...

Hurricanes that devastated parts of the Southeast and wildfires out West have caused the number of claims to skyrocket. Increased catastrophes escalate risk and rates.
Insurers withdrawing from disaster-prone areas causes a shortage of available coverage. Fewer insurance carriers in a region mean those that remain shoulder more risk, raising rates.
Though inflation has abated somewhat since 2021’s peak, building material costs are still the highest in decades.
A labor shortage in the building trades has extended construction timelines and caused wages to increase.

Are you powerless?

Although each factor is beyond our control, you can minimize the impact with your own decisions....

Shop insurance rates each year. It never hurts to see if you can get a better deal. Make sure you compare apples to apples with the same deductible, coverage amounts, property valuation, etc.
Take a higher deductible. Use the difference in premium costs to set aside savings to “self-insure” for the deductible that might come when a claim happens.
Bundle your home, auto, and umbrella coverages with the same company, and you’ll receive a discount on each line of insurance.
Keep your home well-maintained. Add “hurricane straps” to your roof structure and storm windows if you live in a hurricane-prone area. Keep your brush cleared around your house in wildfire-prone areas to remove potential fire fuel. Document these steps for the insurance carrier to get a break on your rate.
Maintain good credit by keeping your debt low and making on-time payments. Insurance companies consider credit scores an indicator of a person’s risk profile.

You can’t control the external factors, but what you can control makes a difference....

Buying, Financing a Home,

How Tariffs Might Affect the Housing Market

The new administration in Washington, D.C., has announced trade tariffs, causing confusion and turmoil in various markets. Economists warn that tariffs will mean higher prices for a host of goods, including houses. How might tariffs affect the cost of a home?...

What are tariffs, and who pays them?

Governments impose tariffs, which are taxes on imported goods, to make foreign products more expensive and to give domestic businesses a competitive advantage. The idea is to encourage US companies to buy products made in America; however, tariffs can significantly raise the costs of goods for American consumers. As an example, if the US imposes a tariff on steel imported from China, then buyers of Chinese steel in the United States will have to pay more for that steel. If auto makers use Chinese steel to manufacture cars, then the higher production costs are passed on to the customer, who ultimately pays the increased price....

How do tariffs affect the housing market?

Higher prices for materials such as lumber and metals (and even appliances) raise the cost of new construction. Prices may not just rise, but they may also fluctuate, creating instability:...

New home builders raise the price of homes due to rising costs for construction materials.
Homeowners’ insurance costs rise because the potential insurance payout for a loss increases.
Some potential buyers get priced out of the market by the increases.
Opportunities arise for buying pre-owned homes that are not subject to rising materials costs. But as this demand rises, so do existing home prices.
Discouraged buyers opt for the rental market. Increased rental demand raises lease rates.
Sellers in a soft market and with high interest rates stay put and don’t try to sell.
In turn, the softening of demand causes home prices to retrench. Home builders may offer incentives to attract buyers. Thus, conflicting factors cause prices to become unstable.

Financing may go through a similar cycle:...

The increase in the cost of materials and subsequent increase in new home prices could cause the Federal Reserve to hold the line on the high interest rates of recent years, or even raise them slightly, trying to dampen rising inflation.
Higher rates dampen demand as the cost of homeownership rises, pricing many buyers out.
As demand softens, the Fed decides to dial back rates, trying to “fine-tune” to prevent a recession. This is known as a “soft landing” for the economy, which is difficult to accomplish.

What should home buyers and sellers do?

In uncertain times, buyers and sellers alike need to simply stay vigilant. Prices rise and fall due to fluctuating market conditions. Therefore, it is essential to research current market trends, interest rates, and your local housing market’s performance. ...

Two practical steps to take are to have a real estate agent already on board, briefed on what the buyer’s or seller’s goals are, ready to move quickly on an opportunity. Second, buyers should have a mortgage preapproval already in hand to be able to act quickly at the right opportunity....

Marketing The Home, Selling,

How to Hire the Right Listing Agent

While more than half of home sellers interview only one real estate agent before hiring someone, it’s wise to meet with at least three before making a decision. Here’s a checklist to help you through the process of choosing the right listing agent....

Start with referrals. Ask trusted family members and friends for referrals. Assemble three or more names, set appointments and interview each of them.
Experience counts. An agent with at least two to three years experience should be able to handle any problems that surface in marketing and selling a home. Although don’t count out newly licensed agents that are motivated to deliver top-notch customer service to grow their client base.
Digital marketing savvy? This is huge. More than 80 percent of home shoppers start their searches online. Find the agent’s own business website. It should be attractive and offer professional photos and virtual tours of listed homes. The agent should be comfortable using Facebook and other social media platforms.
Selling numbers? Has the agent sold any homes in your neighborhood? If so, how many? Ask about other listing stats, such as days on market, average sales price, sales price as a percentage of the list price, but remember to put these numbers in the proper context, particularly if in the midst of a slow market.
Preparations. Did the agent come prepared with comparables, sales trends in your area and other insightful data to enhance your sales strategy?
Copy of an agency agreement. The listing agent should clearly spell out what services would be included in the agreement and what would be the financial responsibilities of the seller.
Buyer feedback? This is an important tool that your agent should offer. Online sites such as ShowingSuite.com make it easy for buyers and showing agents to leave comments and ratings.
Extra training and certification? A good listing agent adds certifications and takes special courses to benefit clients.

...

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