5 Need-to-Knows Before You Move Into The Neighborhood

Now that the holidays are over and you look at all the gifts given and received, you may realize that space is at a premium.

The real estate buying season is fast approaching and you may be giving some thought to buying a first home or upgrading to a larger one. Traditionally, right after the Super Bowl the spring season kicks off.

Buying a home can be very overwhelming. Everything from mortgages to contracts to property condition issues, there’s a lot to learn. An additional area you’ll definitely want to investigate in detail is your new neighborhood. 

Here are five things you should consider before buying

 

1. Is it a safe neighborhood? 

Before you buy a home or move into a neighborhood, do the research and check out things like Megan’s Law databases to see where registered sex offenders live. Stop by the local police precinct. Ask them about the neighborhood, and in particular the address of the house you are thinking of buying. If its a problem location, they will know for sure. Remember to utilize websites that offer crime maps and neighborhood information.

You may be very surprised at what you find.

2. How hard was the area affected by the recession? 

Look, its a fact that some locations have fared better than others over the course of the recession. Some of the hardest hit neighborhoods are where the best deals can be found, but understand that the harder hit areas might take longer to see a rise in home values, so you may want to stay put longer before you sell. 

3. The neighborhood’s flavor. 

Does the area you’re considering meet your needs? Are there parks and family friendly activities, or is this an area where mostly seniors live? Are there other children on the block or is it a place that brings in mostly singles due to its proximity to night life. What about traffic?. Is the street used as a cut through to get to other major roadways or highways, or is it located near a school or house of worship causing delays and congestion?

4. The feeling at different times of the day.

A home, and a neighborhood, might feel different at various times and days, so visit several times and at different times. On a sunny Sunday afternoon you may and see children playing,but at night you may see groups hanging out on the corner, or there may be music blasting from a nearby home. Knock on the neighbor's door and see what they can tell you. 

5. Neighborhood hot spots. 

Before you buy or move into an area, find out where all the stores, parks, restaurants and other hot spots your family will want to use are located. Your real estate agent can be a 

fabulous source for this kind of information.

Neighborhood information can be found by doing a simple google search, or accessing websites that offer these statistics.

Some excellent web sources are Sperlings Best Neighborhoods and SchoolDigger.com.

Happy New Year.

Frank

The 3.8% “Unearned” Income Tax

Now that the holidays are upon us, and the New Year is around the corner, I would like to take a moment to shed some light on the upcoming 3.8% tax that we have been hearing about.

The tax is set to go into place starting January 1, 2013. 

First, I would like to start off by telling you what the tax is not.

• It is not a sales tax on home sales
• It does not increase the transfer tax
• It will not affect any deductions already in place when the gains are less than $250,000 for an individual or $500,000 for a married couple
•  Lastly, the mortgage interest deduction will not be eliminated

The 3.8% is a tax on “Unearned” income, which includes investments, rental income and home sales.

So if you are asking if the tax will affect the sale of your home, the answer is no.

If you are in a tax bracket of an annual income of $250,000 or more, the capital gain on the sale of your house has to EXCEED the $250,000-$500,000 capital gain exclusion.

This is a very simplified explanation of how the tax works. I am not a financial advisor (nor do I play one on TV.) I strongly recommend that you speak with your accountant/advisor for a more detailed clarification.

Happy Holidays.

Frank