Archive for March 2013

 Deborah  203.994.4297

CT Home Buyer and CT Home Sellers–This time of year brings out many tax–scam artists who prey on low-income consumers and unknowing seniors. Here are few tips that can hopefully keep you aware of the scams.

·         The “IRS” sends you an email. The IRS doesn’t send unsolicited email to taxpayers.

·         The IRS calls you and offers filing help over the phone… “if you will just get your social security number we can start now”. The IRS would never call in a situation where you do not have ongoing communications with them.

·         You get a text message or note on your social networking site from the “IRS.” They will never contact you this way.

·         You see an offer from an unfamiliar for-profit tax service selling refund and credit schemes.

·         You get internet offers for tax help directing you to call toll-free numbers… and they ask for your Social Security number.

·         There is an offer of free money from the “IRS” (or Social Security) with no documentation required.

·         You see a promise of refunds for “Low Income – No Documents Tax Returns.”

·         You’re offered a way to make a claim for the expired Economic Recovery Credit Program or for economic stimulus payments.

·         You get an offer for free tax preparation for a split of the refund.

·         You get offers for help on your taxes from firms outside your immediate area.

Like most scams, sometimes the caller says your bank account information is needed to send you a direct deposit for the expected tax refund. Instead of sending you a cash refund, they will drain your account.

Another version: An e-mail states you have a tax refund owed to you and they’ll deposit it directly to your Visa or MasterCard. All you have to do is fill out an attached form. Don’t do that either.

Deborah Laemmerhirt  203.994.4297

Whether you are buying or selling a home in Connecticut you should research the areas and towns you are considering.  The information is available so check it out!

Community Info for Connecticut Towns and Cities:

Gain valuable insight into a community by looking at:

• household incomes,
  
• crime risk,
•  education levels attained,
  
• and potential for extreme weather.
•  Use the map to locate points of interest like shopping, restaurants, and healthcare services.

Select the Link below and enter an area Zip Code:

Community Information Link

Select the Link below to Generate Local Connecticut School Information:

The quality of a school can greatly influence home values in an area. On this page you’ll find detailed information on school districts, school ratings, test scores by grade, student-teacher ratio, and much more.

Local CT School Information Link

Compare Connecticut Areas (by selecting 2 zip codes)

Compare where you live to a new location or multiple areas using current information on community summaries, market stability, schools, listing vs. sold price, buyer vs. seller market, and even smoking bans.

Area Comparisons Link

Insider Tips:

Explore a wealth of information that will help you better understand the factors that impact the real estate market. Consider this page your reference library for resources, tips, and techniques.

Information Resource Link

Market Analysis:

Deborah Laemmerhirt  203.994.4297

The data you can generate with the link below is consolidated from multiple sources and includes current listings, recent sales, and more. Whether you’re a buyer or seller, the knowledge you gain will help put you in control of your real estate transactions.

Select the link below and enter the zip code that interests you.  You can analyze for Price Trends, Market Inventory Trends and Property Ownership.  Click below and enter a zip code to try it out!

• Compare Sold to Listed
• Unoccupied homes to occupied home ratios
• How many days on the market

Market Analysis Link

Deborah Laemmerhirt  203.994.4297

The purpose of diversification is to combine assets with low correlation in order to reduce the risk and volatility in your portfolio. Correlation is a statistical measure of how one asset class performs in relation to another asset class.

Correlations can range from +1 to -1. A correlation of +1 means the two assets move very closely together in the same direction. Combining assets with a high positive correlation will not provide much risk reduction. A correlation of -1 indicates the assets move in opposite directions, a rare event in the investment world. A correlation close to 0 means no relationship exists in the price movements of the two assets. Combining assets that are not highly correlated can help reduce a portfolio’s volatility. The lower the positive correlation or the higher the negative correlation, the more risk that is potentially reduced.

Would combining assets with low correlations help during market corrections? In 2002, the S&P 500 had a -22.1 percent return, while long-term government bonds returned 17.84 percent.** Keep in mind that combining assets with low correlation is a defensive strategy. Your return will always be lower than if you had only invested in the higher performing asset.

When selecting investments for your portfolio, don’t just look at their risk and return characteristics. Also consider the diversification aspects for your overall portfolio. While correlations change over time, general observations include:

    Stocks tend to have a low positive correlation with corporate and government bonds.

    Short-term bonds tend to have a low correlation with long-term bonds.

    Stock markets around the world are all positively correlated to some degree. In general, European stock markets are more closely correlated to each other and the U.S. markets than to markets in Japan or Asia. Correlations between developed countries tend to be higher than correlations between developed and emerging countries.

    Real estate tends to have a low correlation with stocks and bonds.

* Source: The CPA Journal, November 2003. The S&P 500 is an unmanaged index generally considered representative of the U.S. stock market. Foreign stocks are measured by the EAFE Index, emerging market stocks by the World Bank Global Index and Emerging Markets Free Index, real estate trusts by the National Association of Real Estate Investment Trusts, and bonds by the Lehman Brothers Aggregate Bond Index. Investors cannot invest directly in an index. These correlations are presented for illustrative purposes only and are not intended to project the performance of a specific investment.

** Source: Stocks, Bonds, Bills, and Inflation 2003 Yearbook, Ibbotson Associates. These returns are presented for illustrative purposes only and are not intended to project the performance of a specific investment. Past performance is not a guarantee of future results.

Deborah Laemmerhirt  203.994.4297

Foreclosures are bad news for banks and delinquent homeowners, but they can offer the best real estate deals in town for the rest of us.

CT Houses, CT condominiums, vacant lots, warehouses, office buildings and even factories can all be purchased after a foreclosure. Problem is, well-informed investors often snap up the premium deals before the general public knows about them. But you can compete if you know what you’re looking for.

There are three main opportunities for finding a good deal on a foreclosure – talk to your real estate broker for assistance in this process:

Opportunity 1 – Distress. These properties are the hardest to find until you know where to search. Drive around and look for vacated premises and properties that aren’t being kept up  –  un-mowed lawns, poorly maintained siding and overgrown shrubs. They are likely candidates for foreclosure. 

Then, scour the public records to find the owners and get in touch with them. Often, the property has become a headache and the owner is ready to dump it. That’s obviously to your advantage in negotiating a good deal.  If the property is not bank owned your real estate agent would be the best option to obtaining additional information and help you with obtaining the property.

Opportunity 2 – Public postings. During foreclosure, properties are listed in newspapers. If you find one you like, contact the lender and the owner? Both must agree to any deal. You need to pay any arrears and then assume the mortgage to take ownership.

Caution: Don’t move until you have the signatures of the lender and the owner.

Opportunity 3 – Repossession. At this point the banks have taken possession and are eager to get rid of the properties because they aren’t making any money on them. Get lists of Real Estate Owned (REO) properties from banks.

The banks may have set sale prices on the properties, but they are sometimes negotiable. Get to know your bankers and ask them to tell you about promising properties as soon as they are available.

With a little foresight and work, you can beat the pack and wind up with a good deal on a long-term investment or second home. And once you find a property you like, check with your financial adviser and some real estate pros to be sure it’s a worthwhile investment and fits in with your long-range financial strategy.

Deborah Laemmerhirt  203.994.4297

   It’s been said that your home is your Castle. But one U.S. Supreme Court decision weakened the Castle’s defenses in situations where the government is seeking to acquire property for public projects.

   CT Homeowners be warned!  In the case, the justices reaffirmed that cities can condemn properties under the doctrine of eminent domain if the land is to be used for a public purpose. The decision was important because, for the first time, it expands the definition of public purpose to include economic development projects. (Kelo, No. 04-108, 6/23/05)

    Officials of the city of New London, Connecticut, sought to buy 15 homes in a residential neighborhood to clear the way for a redevelopment project handled by private developers. The project calls for an office park, hotel and upscale housing to be built along the Thames River.  CT Home Buyers should know their rights.

    City officials say the project is key to their redevelopment plans for the area, which has been dogged by high unemployment rates and a population drain for decades.

   Homeowners who opposed the redevelopment effort appealed a Connecticut Supreme Court decision that allowed the city to force them to sell their property under its eminent domain powers. That doctrine allows governments to buy private property at fair market value to facilitate public projects.

    In arguments before the Supreme Court, the landowners contended that governments can’t take private property except for projects that are clearly for public use, such as roads or libraries. To do so would unfairly weaken private property rights that are considered fundamental across the U.S.

    A majority of the Supreme Court dismissed those arguments. Justice John Paul Stevens said municipalities could acquire land to pursue private development projects without violating the constitution as long as officials can show the projects benefit society as a whole. Those benefits could include new jobs and increased tax revenue.

    However, the High Court noted that states are free to pass restrictions on cities’ eminent domain powers if residents want to strengthen private property owners’ protections.

    The Kelo decision should serve as a warning to homeowners and CT Home Buyers that governments’ eminent domain powers could trump their rights in disputes over economic development projects. If necessary, consult a land-use attorney in your area to learn how your state approaches such rights.

Deborah Laemmerhirt  203.994.4297

From the time an applicant walks through the door to the actual closing, lenders have become very cautious about the entire home mortgage loan process. Even when an applicant has a good down payment and good credit, issues arising at the last minute can result in the loan being denied.

Here are four tips to help CT Home Buyer applicants ensure they don’t encounter last-minute problems right before their mortgages close:

1. Avoid major purchases and large cash withdrawals.

Even after the mortgage loan has been approved, high-dollar purchases should be avoided until after closing. Many applicants are under the assumption that an approval is the end of the deal, but this isn’t the case. Lenders view major purchases as more debt for the applicant and more risk to themselves. They’ve been known to pull mortgages right out from under applicants that make major purchases, such as a car, during the mortgage process. Since lenders assess an applicant’s cash reserves during the loan approval, paying for such purchases with cash is even out of the question.

2. Don’t forget about last-minute credit checks.

The new rules contained in Fannie Mae’s loan quality initiative mean that lenders are likely going to do another credit check shortly before the mortgage closing date. This is when the lender will discover any major purchases mentioned above. It’s also the point that the lender will see if an applicant has been delinquent in paying credit card, existing mortgage, and other debts since first applying for the mortgage loan. Such delinquencies can cause a dip in the applicant’s credit score. In fact, even just applying for a new credit card between the approval and closing dates can possibly result in a credit score dip. Don’t jeopardize the standing of a loan by not being prepared for a second credit check.

3. Postpone big career or job changes.

Lenders carefully consider an applicant’s job stability and salary during the loan approval process. If the equation changes, such as when an applicant changes jobs, the mortgage loan may be either pulled completely or delayed until the individual can demonstrate that the new job is stable and provides the financial resources necessary to pay the mortgage. Lenders especially frown upon an applicant changing industries during the mortgage loan process. If possible, postpone making any changes to you employment status until after you have the keys to your new home in hand.

4. Expect unexpected costs.

Closing-cost surprises are commonplace, which is why it can be a big mistake to put all of your reserved money toward the mortgage down payment. Closing costs can change and can amount to as much as three percent of what the applicant is paying for a new house. In other words, someone buying a $100,000 home could potentially pay as much as $3,000 in closing costs. The last thing you wants is to make it all the way to the closing cost portion and find that you lost the home because you haven’t set enough money aside to cover mortgage rate points or closing fees.