New Construction: Rule #1

HIRE A REALTOR TO REPRESENT YOU. It might seem like buying a new home directly from a builder would be straightforward, but trust me…it’s not. Using a Realtor is a game changer regardless of the age of the property.

• Local Knowledge: I provide insights into the best neighborhoods, builders with a strong reputation, and upcoming projects you might not be aware of.


• Access to Inventory: I have access to info about new projects that may not be widely advertised yet. I can connect you with builders and developments that match your specific criteria, potentially giving you access to a broader range of options.


• Negotiation Skills: Even in new construction, there can be room for negotiation. I can help you negotiate price, upgrades, and builder incentives. My goal is always for my clients to get the best deal possible.


• Advocacy: I am always your advocate and will communicate on your behalf with the builder, addressing any concerns or issues that may arise during construction. I visit the site regularly and stay in close contact with the construction manager. 


• Quality Assurance: I will guide you in selecting reputable builders known for quality construction (this is incredibly important). I’ll also recommend third-party inspectors to ensure that your new home is built to the highest standards.


• Market Analysis: I’ll provide you with a market analysis to help you understand the potential resale value of your new construction home. And will advise you on how to make choices during the building process that may enhance the property’s long-term value.


• Time and Stress Savings: I will help streamline the process, coordinate with the builder, and ensure that everything is on track, saving you time and reducing stress.

  

  I’m always here to share my expertise, support, and give you peace of mind throughout the process. I want my clients to make informed decisions and get the most out of your investment. Here to chat if you have any questions!
  
  CONTACT ME
  Erica Tucker
  ericatuckerrealestate@gmail.com
  832-444-7040
  Follow on IG: @ericatuckerrealtor
  
  ”Listen to advice and accept instruction, that you may gain wisdom in the future. Many are the plans in the mind of a man, but it is the purpose of the Lord that will stand.” Proverbs 19:20-21

Build Wealth With Real Estate

Building wealth with real estate while minimizing or deferring capital gains taxes often involves using tax-advantaged strategies and structures. Here are a few methods to consider:

1. 1031 Exchange:

   • A 1031 exchange, aka a like-kind exchange, allows you to defer capital gains taxes when you sell an investment property and reinvest the proceeds into another similar property. The key is to follow IRS guidelines and deadlines for identifying and acquiring the replacement property. This strategy can be used repeatedly to defer taxes indefinitely.

2. Primary Residence Exclusion:

   • If you've lived in a property as your primary residence for at least two of the last five years, you may qualify for the primary residence exclusion. Under this rule, you can exclude up to $250,000 (or $500,000 for married couples filing jointly) of capital gains from the sale of your home from your taxable income. This can be a significant tax benefit for homeowners.

3. Real Estate Investment Trusts (REITs):

   • Consider investing in Real Estate Investment Trusts (REITs). These are investment vehicles that allow you to invest in a diversified portfolio of real estate assets without directly owning properties. REITs often provide regular income and have certain tax advantages, such as not paying corporate income tax if they distribute at least 90% of their taxable income to shareholders.

4. Tax Credits and Deductions:

   • Take advantage of tax credits and deductions related to real estate investments. For example, you may be eligible for deductions on mortgage interest, property taxes, and expenses related to managing your real estate properties.

5. Estate Planning:

   • Engage in estate planning to transfer your real estate holdings to heirs with minimal tax consequences. Strategies like stepped-up basis upon inheritance can help reduce capital gains tax liability for your heirs.

It's important to consult with a qualified tax professional or financial advisor to develop a personalized real estate investment strategy that aligns with your financial goals and helps you minimize or defer capital gains taxes legally and effectively. Tax laws can be complex and subject to change, so professional guidance is crucial.

CONTACT ME
Erica Tucker
ericatuckerrealestate@gmail.com
832-444-7040
Follow on IG: @ericatuckerrealtor

“For I am the LORD your God who takes hold of your right hand and says to you, Do not fear; I will help you.” Isaiah 41:13

Is A Home Warranty Worth It?

I get a lot of home warranty questions from current and past clients. Buyers are wondering if there is value in purchasing (or asking the seller to purchase) a home warranty, and past clients are wondering if they should renew. 

What exactly is a home warranty?

An annual service contract that can cover the cost to replace or repair home appliances or systems that may break down at some point. 

You can choose the amount of coverage you want - similar to an insurance policy - only this is only for your appliances and systems. 

How much is a home warranty? 

Packages typically range from $500-$800 with service charges from $50-$75. There are also add-ons for things like septic systems and pool that can be well worth it. Many times the seller will pay for some or all of the home warranty to cover the first year for the buyer, but this is a negotiable term in the contract. (I’ll do another post on contracts and negotiable terms).

What is covered with a home warranty? 

Basic Plans

Central Air Conditioning, Heating, Electrical system, Ductwork, Garage Door Openers, Plumbing System, Attic, Water Heater, Built-In Microwave, Dishwasher, Oven/Range/Cooktop

Deluxe Plans

Washing Machine and Dryer, Code Violation, Refrigerator, Upgrades for HVAC and Kitchen Appliances, Improper Installation, Repair Modifications,  Permits/Haul Away,  Deluxe Enhancements

Add-Ons

Pool/Spa, Above Ground Pool, Geothermal Heating System, Central Vacuum, Roof Leak, Ice Maker, Well Pump, Additional Refrigerator

How Does It Work?

1. Service Request: Contact the claims department, explain what’s going on, and request service. 

2. Appointment: A local service technician will coordinate a time that works for you.

3. Service Fee: Most companies charge $50-$75 for the service fee and you will likely pay the technician directly 

4. Item will be repaired or replaced: The technician will determine if the item can be repaired or if it will need to be replaced. If it needs to be replaced, the warranty company will determine coverage eligibility and see if it's a complete replacement of the item or explore a claim buyout. For example, they might cut you a check for the item and you go get another one. This can cause frustration because not every situation or company is the same and if they were to cut you a check, it might not cover the cost of the new item. 

Do You Really Need One?

This is the million dollar question. It really depends on the buyer and their situation. If you’re a first time home buyer or you’re relocating to a new city and you don’t have a network of trusted professionals you can call to service any item that breaks, it’s nice to know that your home warranty company will direct you to a licensed and you know upfront what that service fee will look like. It’s definitely more beneficial on the bigger ticket items like HVAC. 

It can be frustrating when they come out only to say that they can’t cover what you need or that the replacement cost will be more than they can cover.

I do have a number of clients who never touch their home warranty…including myself, but for me I like the peace of mind in knowing that if something major happens, there’s a pretty good chance a home warranty will come in handy. 

Overall, it can be comforting to know that you have a little protection if something breaks, so I say it’s worth it. 

Let me know if you want to talk more about this or would like some recommendations on home warranty companies that me and my clients have had success with. Always here to be a resource!

I also LOVE to answer questions and offer guidance, so please contact me if I can help!

One more thing…if you’re looking to buy or sell, I’m offering a rebate to new clients at closing. Ask me for details if you’re interested!

Determine Your Interest Rate

Do you know how your interest rate is determined? Here are some key factors that influence your mortgage interest rate:

There are a variety of loan programs such as, conventional, FHA, USDA, and VA and each may have varying interest rate structures. Each program has its own set of guidelines, which can affect the interest rate offered.

Home Location

Rural vs urban, property values and property taxes, local economy, and risk factors (such as flooding) may all play a part in your interest rate.

Credit scores

Generally, if you have a higher credit score, your interest rate is likely to be lower. And if you have a lower credit score, your interest rate might be higher. Lenders view credit scores as a way to predict if you will be reliable in paying back your loan.

Loan Amount

Once you know the home price, down payment, and estimated closing costs, you can calculate the amount you’ll need to borrow by subtracting your down payment and any upfront costs from the home’s purchase price. Your interest rate could be higher based on the amount borrowed.

Down Payment

Typically, when you put more skin in the game (a larger downpayment) you will get a lower interest rate. The lower the overall cost to borrow (ie, lower interest rate) means you keep more money in your pocket in the long run.

Loan Term

A 30 year loan for example will have a higher monthly payment and a higher interest rate than a 15 year loan.

Keep in mind that whatever your situation looks like, I ALWAYS recommend talking to multiple lenders before making a final decision on where to get your loan.

I love to connect my clients to the best industry professionals, so let me know if you would like a list of my preferred lenders.

I also LOVE to answer questions and offer guidance, so please contact me if I can help!