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Serving South Florida

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For over 35 years

Retirement

How to Declutter for the New Year!

The idea of living a simplified, uncluttered life with less stuff sounds attractive to many. They have considered the benefits of owning fewer possessions: less to clean, less debt, less to organize, less stress, more money and energy for their greatest passions. They are ready to declutter but some get quickly tripped up by the very next question… where in the world do I begin?

Many begin to feel overwhelmed, anxious, and defeated around the idea of decluttering their homes. That’s too bad. The decluttering journey doesn’t need to be as painful as some make it out to be. In fact, there are a variety of people who have come up with some pretty fun, creative ways to get started.

Below are three decluttering philosophies to help you clear out and clean up your home and life.

Feng Shui — The driving principle behind this Eastern philosophy is to create harmony and balance between an individual and his or her environment. Good feng shui invites prosperity and brings an overall sense of well-being into your space. From the front door to the bathroom, small changes to color, decor and furniture arrangement are believed to promote health, wealth, happiness and good energy.

The KonMari Method — Famed Japanese organizer Marie Kondo promises that you can drastically improve your lie by tidying up.  In her book, “The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing,” she explains a two-step approach. First, you take all of your possessions and lay them out categorically (clothes first and sentimental pieces last). Then, you hold each item in your hand and decide whether or not it brings you joy. If it doesn’t, you let it go.

The 90/90 Rule (Minimalism) — This home organization concept also relies on a two-part process. When implementing the 90/90 rule, assess each belonging based on two simple questions: Have I used it within the last 90 days, and will I use it in the next 90 days? If not, it’s time to say goodbye.

While some of these techniques require a big commitment of time, energy and emotional “letting go”, it may require starting with small steps before you fully embrace the concept of minimalism, if at all.

Consider this list of 10 creative ways to declutter your home:

Give away one item each day.  By giving away one item at a time and donating it to someone less fortunate you can declutter and enrich your life.

Fill one trash bag. Early in your journey towards simplicity, a favorite decluttering techniques is to grab a simple large trash bag and see how quickly you can fill it. This could also be used to fill a bag for a needy charity or just toss in the trash.

Try the Oprah Winfrey Hanger Experiment:  While this idea didn’t originate with Oprah, she was the one to help give it notoriety. To identify wardrobe pieces to clear out, hang all your clothes with the hangers in the reverse direction. After you wear an item, return it to the closet with the hanger facing the correct direction. After six months, you’ll have a clear picture of which clothes you can easily discard. This experiment could also be applied to a number of clutter areas in your home (cleaners, toys, linens, tools, hobbies and craft items).

Take the 12-12-12 Challenge. A simple task of locating 12 items to throw away, 12 items to donate, and 12 items to be returned to their proper home can be a really fun and exciting way to quickly organize 36 things in your house. This challenge actually became a quick competition … and your kids don’t have to be too old to participate as well.

9. Use your imagination. Psychology Today recommends using your imagination to help declutter objects that may seem difficult to remove. Try asking yourself unique questions like, “If I was just buying this now, how much would I pay?” These creative techniques may prove to be very helpful for some with difficulties removing unneeded clutter.

No matter what you choose to help you get started – whether it be one of these ten or one of countless others – the goal is to take your first step with excitement behind it. There is a beautiful world of freedom and fresh breath hiding behind that clutter. How you remove it is up to you.

Ultimately, there’s no shortage of ways to declutter and simplify your life. The important thing is to be willing to let go of the items that no longer serve you and make way for new experiences.

How To Buy A Second Home?

You’ve found the perfect new home for your family, but your current house hasn’t sold yet. You can’t afford to carry two mortgages, or maybe you were counting on money from your sale to help with the down payment and closing costs.

Before you let that dream home slip away, consider these strategies to help bridge the transition:

Make an offer that’s contingent on the sale of your house:

A seller may be persuaded to accept your offer with the caveat that you’ll have to sell your house before closing on theirs. You’ll strengthen your chances of getting a seller to take a chance on you if you can show that your home is priced properly and has a solid marketing strategy.   Successful contingency offers depend on good communication between the real estate agents representing both sides.  It’s up to you and your agent to reassure the seller that the closing won’t be delayed.  Obviously, in hotter housing markets with potentially multiple bids, it can be harder to get sellers to accept such an offer.

Offer the seller a rent-back option:

One way to buy yourself extra time to complete your sale is to offer to buy the new house, then rent it back to the seller after closing.  A rent-back agreement is typically for just a month or two. But this arrangement can give sellers extra time to move – or to find a new house of their own – while putting a little money in your pocket and keeping you from having to pay two mortgages at once.

Tap the equity in your current home:

If you have a high credit score and considerable equity in your house, you could free up some of the latter with a home equity line of credit. A HELOC lets you use up to 85 percent of your home’s value, less the balance remaining on your mortgage, and is fine-tuned based on your credit profile and income. Most HELOCs have a variable interest rate, so it’s in your best interest to pay off the loan as soon as your current home sells.

This strategy may let you buy a house before you sell, but it’s not a last-minute option. A HELOC requires an appraisal, income verification and a thorough credit check, so it takes time – generally 30 days or more – to qualify, says Tim Beyers, mortgage analyst with American Financing in Aurora, Colorado. If you’re thinking of going this route, make sure you run the numbers with an expert upfront, Beyers says.

To qualify for the new loan, a lender will evaluate your current mortgage payment, plus the HELOC payment and your new monthly mortgage payment, to calculate your debt-to-income ratio for the new mortgage approval, Beyers says. If your income is high enough to have a debt-to-income ratio below 40 percent with all those payments and other monthly expenses taken into account, only then should you consider a HELOC, he adds.

“Once you start dipping into your home’s equity, that changes the equation when you apply for a new mortgage,” he explains. “Taking too much out can hurt your qualification chances on a new mortgage. Don’t make an offer, then try to scramble to do the math.”

Add a HELOC to your new mortgage:

With this strategy, you break up the financing on your new home with a first mortgage for the amount you need, plus a HELOC to make up the difference in your shortfall for a downpayment, says Elise D. Leve, senior mortgage banker at Citizens Bank in New York.

Once you sell your current home, you can pay the HELOC portion off in full and end up with the single mortgage you wanted in the first place, Leve says.

Get a Bridge Loan:

A much riskier strategy is what’s called a ‘bridge’ or ‘swing’ loan. Using your existing home as collateral, you take out a bridge loan for three months to five years to use as the down payment on your new home. Once you’ve purchased your new home, you sell the old one and pay off the mortgage and the bridge loan. Such a loan is less risky in a fast appreciating market where appreciation can cover the extra payment on the old home. Even in the best market, however, swing loans can be expensive, last-ditch propositions that are fraught with caveats. Bridge loans can cost 5 to 10 percentage points more than a typical equity loan. Your home must be lien free. Excellent credit is mandatory, as are good income-to-debt ratios. It may be a better idea to get a cash-out refinance, second mortgage or equity loan to use as a bridge loan. Traditional financing is cheaper and less risky, but that could preclude you from landing another mortgage for a new home should the lender consider you stretched too thin.

Most Often Asked Homebuyer Questions – Answered!  

Buying a home is a major lifestyle and investment decision. Homebuyers have a lot of questions throughout every step of the process and I have found that many of the questions are common to many. Here are some answers to the most common questions I get asked.

Q: What home can I afford?

That depends, of course-on your income and other financial obligations. There are many Home Affordability Calculators for a ballpark figure. A visit to the Optima Properties website will offer you many tools under the  Finance Center!

Before you start to shop, make sure that you know exactly what you can afford by getting pre-qualified by your financial institution of mortgage broker.

Q: Can I buy a home and sell my current one at the same time?

Yes, you can-but it’s the real estate equivalent of walking a tightrope. This is one of the trickiest questions to answer, on the one hand, if you buy a home before you sell the one you’re in, you’re overextended financially; if you sell before you buy, you might need to rent a while before finding a new place. There are ways to do both at once, and one option is to request a “sale contingency” in your contract. This means you only agree to buy a home if you can sell the one you’re in. The only downside is if your seller doesn’t agree and will not agree to this condition….it never hurts to ask!

Q: How many homes should I see before making an offer?

As many as you need to!  While home shoppers these days can look at hundreds of homes online, most need to physically visit the area and stand in the properties before they put in an offer. Keep in mind, this varies tremendously for each person. Some people find their home within hours of looking or make an offer sight unseen because they have definitively defined their criteria. For others, it takes months and sometimes over a year if they are trying to determine the area, lifestyle, and type of home that meets their requirements.

Q: What do you think the seller will accept as a fair price?

As a rule of thumb, knocking 5-10% off the list price

won’t ruffle any feathers for an initial offer. If the property has been sitting on the market for months, you can venture below that, but the bottom line is, you never know how low a seller will go, as they have different motivations for selling.  Your Exclusive Buyer Agent should develop a Comprehensive Market Analysis to determine the market value of the property. This should be your guideline as to how much to offer and how high to go.

Q: How do I know if the property is a good deal?

While there’s no crystal ball on whether a certain home is a bargain and will appreciate, rest assured that with research, you can keep surprises to a minimum. The best way is to check out comps-what similar properties are selling for in the area.

Q: How quickly can I close?

If you are paying cash you can typically close in the time it takes to get the home inspected and have a lien, permit, and title search conducted. The new TRID requirements for home loans have extended the time required to get a mortgage.  I advise all my buyers to not commit to a closing for less than 60 days from the effective date of the contract.

Q: Should I get a home inspection?

My only answer to this question is YES, YES, YES! A certified and licensed home inspector ( not your father in law) will look into the condition of the roof, electricity, heating and air, plumbing, among other functions and conditions of the property.  Even if you are just purchasing land you should check for soil contamination, septic perkability, etc.

Q: Can I back out if I change my mind?

While buyers can always back out of a deal, doing so without good reason may forfeit their earnest money and full deposit.  The form of contract you choose to use may provide you with different outs. Contingencies are great “escape clauses. For example, if you enter into an AS IS contract upon an unsatisfactory home inspection, the buyer can ask for their deposit back. Another contingency is “subject to appraisal.’” That means you can back out if the appraisal either ordered by your closing agent or your lender results in a valuation that is less than the agreed to purchase price.
Bear in mind that the more contingencies you include in your offer the less room you have to negotiate other terms and conditions of the contract with the Seller.

There is not question to small or unimportant when purchasing a home.  There is a wealth of information available and your agent should assist you in getting your questions answered in a timely manner.

 

 

Why Fla. is the Best State for Retirement

Sunshine, beaches and a laid-back lifestyle have made Florida one of the top destinations for retirees looking to live out their golden years in peace and comfort.

Now a new study from WalletHub.com has named the Sunshine State the best place in the U.S. to retire based on its affordability, quality of life and healthcare. The website pointed out that nearly a third of non-retirees have no retirement savings or pension and said it made its choices to help retirees find the states that offered the most bang for their buck.

Rounding out the top five for 2016 after Florida were Wyoming, South Dakota, South Carolina and Colorado.

At the bottom? Vermont, Connecticut, Hawaii, Washington D.C. and Rhode Island.

Here are the top six reasons why Florida is the best place to retire, according to WalletHub.

Hole in one!
From Seminole Golf Course in Juno Beach (the state’s top ranked links, according to GolfDigest) to Trump National Doral, Florida has the most golf courses per capita in the nation.

Company
Looking for new friends? You won’t be lonely in the Sunshine State, which has the highest percentage of people aged 65 or over of any state.

Out on the town
It’s not Broadway, but theatergoers in Florida have more and better options than ever before. The state has the sixth-most theaters per capita in the U.S.

Help at home
The cost of hiring a nurse and other in-home help can break the bank for many seniors. But Florida has the eighth-lowest cost of in-home services of any state.

Low taxes
Many retirees don’t realize they may need to pay federal and state taxes on Social Security income and withdrawals from IRA and 401(k) funds. Florida’s low taxes make it the 10th-best state for retirees come tax season, according to WalletHub.

A night at the museum
Miami’s burgeoning cultural scene means locals don’t have to travel to New York for their museum fix. From the Pérez Art Museum Miami to the under-construction Patricia and Phillip Frost Museum of Science to HistoryMiami, South Florida museums are on the upswing. Nationwide, Florida has the 15th-most museums per capita.

So what are you waiting for? Florida is calling.

 

Miami Herald, Written by Nicholas Nehamas

The Foreign Buyers Guide – What you need to know about buying real estate in the United States

For many a foreign national, the United States has always been a great place to invest in.

Buying Real Estate in the United States does not give foreign owners any rights or privileges regarding legal stay or status. If you’re interested in staying in the states longer than allowed by a standard visa, contact an immigration lawyer.

By determining the primary use for your property and how long you plan to own it, you’ll be able to provide information to your real estate agent that will help guide the search and sale.

How will you use the Property?

Before you start your property search, it’s important to think ahead to how you’ll use the home once the deal is done.

  • Will this be a vacation home?
  • A home to stay in while doing business in the United States?
  • A home for your children while they attend college in the States?
  • An investment?
  • An eventual long-term residence?

The way U.S. real estate transactions are carried out may differ from your home country. Each State in the US has its own set of rules regarding the purchase of real estate, including the type of purchase contract used, the method of closing the sale and even the duties and titles of the individuals involved.

Several important U.S. real estate practices that are worth noting are:

  • In the United States, real estate listing information is shared by agents using multiple listing services ( MLS) and consumers can access that same information using real estate sites such as com or Realtor.com. In many other parts of the world, real estate is a fragmented business and buyers have to go from agent to agent to find a property.
  • In some countries, it is typical to pay a fee to the agents who are scouting properties on your behalf and showing you around. In the United States, the sales commission is paid by the seller who has a listing agreement with the Seller, so buyers don’t pay anything to have an agent work on their behalf if it is being advertised in the MLS system. It is always advisable for a buyer to work with an Exclusive Buyer Agent who will protect the buyer’s interest in the transaction. Make sure you ask any agent you contact what their “agency relationship” is to you. Each state has different forms of agency and many agents do not work for the benefit of the Buyer.
  • In the United States, real estate agents need licenses to operate. The licensing laws of each state differ regarding how much education is required, the type and depth of licensing examinations, and whether continuing education courses are required once an agent becomes licensed. The licensing system was designed to ensure real estate agents are qualified to guide consumers through the maze of finding, evaluating and financing real estate.

Foreign buyers will also want to give consideration to issues such as currency exchange rates, international wire transfers, banking systems, multi-national taxation and accounting issues, and import/export restrictions regarding currency and household goods. It is recommended that you consult with an accountant and attorney before finalizing any transaction.

Foreign buyers are eligible to buy single-family homes, condominiums, duplexes, triplexes, quadru-plexes and townhomes. Housing cooperatives or co-ops often have rules prohibiting foreign ownership. That’s because co-ops generally require that a buyer’s source of income be from the United States and that most of the majority of the buyer’s assets be kept in the U.S.

Financing or Paying Cash?

Qualified foreign buyers with a 30 to 40 percent down payment can often obtain financing for their U.S. real estate purchases. MANY BANKS REQUIRE FOREIGN BUYERS to have a specific amount ($100,000 or more) on deposit with the bank while others set loan limits of $1 million to $2 million. You may also be required to present a minimum of three months of bank statements.

The U.S. home loan market offers an array of safe, affordable mortgages, including some that will allow Muslims to buy a home without violating Islamic laws against paying interest.

Before applying for a U.S. mortgage, you must first establish credit and earn a good credit score. You can start building your credit score by opening U.S. bank and credit card accounts. You’ll also want to be sure to report all income on your tax returns. Lenders use this income information to determine how much money they’re willing to loan you to buy a home.

While you don’t necessarily need to be a citizen or even have a green card to buy a home in the U.S., you will need an Individual Taxpayer Identification Number.

All cash purchases are permitted, but U.S. law mandates that cash transactions over $10,000 be reported to the federal government. The requirement for reporting involves everyone connected to the transaction (purchaser, real estate agents, attorneys and title companies). The government wants to know how you earned the money and that it was legally obtained. Cash buyers can potentially save money on mortgage application fees, loan origination fees, appraisals and title insurance.

Should I purchase U.S. property in my name?

Foreign investors can purchase property directly – in their own names – or through some sort of business entity, such as a domestic corporation, foreign corporation, limited partnership, joint venture, real estate investment trust or limited liability company.

How the property will be used should play into your decision. Additionally, the structure through which you purchase your property can have dramatic tax consequences. Your real estate attorney and accountant should be able to provide counsel concerning your options.

Do I have to travel to the U.S. for the closing?

While you may very well want to attend your real estate closing, it is not necessary. In the event that you cannot or choose not to attend your closing, you must execute a “Power of Attorney.” This is a written document authorizing another person to represent you and sign on your behalf.  Some lenders may require that you be present in the US to sign their loan documents.  This is something you should inquire about when selecting a lender if you do not plan on traveling for the closing.

How will a U.S. real estate purchase affect my taxes?

A foreign property owners’ tax liability in his home country will vary depending upon where the purchaser is from and whether that country has a tax treaty with the United States. Consult a tax attorney familiar with your home country’s treaty to get answers to tax-related questions.

The United States government requires that foreign nationals pay U.S. income taxes (state and federal) on any net income (rental revenues less expenses) received from rental property. If tax returns are not filed in a timely fashion, a tax of 30 percent of the gross rental income may be assessed. Even if you’re incurring losses in the early years of your investment and you don’t owe any taxes to the government, you still must file your tax returns in a timely manner or be subject to financial penalty.

What is FIRPTA?

FIRPTA refers to the Foreign Investment in Real Property Tax Act of 1980.  This ruling authorizes the United States to withhold income tax when property is sold, exchanged, gifted, transferred or liquidated by a foreigner. The Internal Revenue Service takes 15 percent of the proceeds and the state government will also take a percentage (if applicable). When a US tax return is submitted reporting the capital gains tax, if there is any refund due, that money will be refunded to the filer.

If the buyer of the home from the foreign national investor will reside in the home more than 50% of the time and the home sales price is under $300,000.00, the purchaser is not obligated to retain the 15% tax.