You are about ready to close your real estate transaction on a home; did you consider a home warranty?

“It is not mandatory in any state that you have to get one. But in some states it’s mandatory that it is offered on a purchase agreement of the real estate contract,” says David Sobel, VP of Sales, for Home Warranty of America.

Depending on where you live, you may have heard about a residential service plan or home warranty from your real estate agent. How important are these warranties? What do you really get? Let’s explore.

Why a home warranty?

Sellers want peace of mind that buyers won’t be calling them after the sale of their home, with problems about items in the home breaking down and expecting the sellers to pay to fix them.

Buyers want to know that the home they’re buying is going to be protected and not cost them a lot of money once they move in. The home warranty helps both sides achieve their goals.

Also, in these tough economic times, Sobel says sellers can take comfort in knowing that the home warranty can help. “It does help sell homes,” says Sobel. He says that when buyers are faced with a choice between two similar type houses with a comparable price point, the house with a warranty is usually preferred.

What’s covered by a home warranty?

The plans differ from company to company but, generally speaking, the home warranty covers major mechanical systems and appliances such as furnaces and air conditioning, plumbing and electrical items, and appliances.

“It’s a repair or replacement warranty,” says Sobel. When something malfunctions, the homeowner calls the home warranty company. A technician is sent to look at the problem. The homeowner pays a flat fee for the service call. “Then the warranty company either repairs or replaces the [warranty] covered item,” says Sobel.

When to buy a home warranty?

The best time to purchase a home warranty, according to Sobel, is during the actual real estate transaction. This is because “not all companies offer it later.” Sobel adds that what’s offered later is often not as good, “Those prices [for the home warranty] after the transaction typically increase and the coverage usually decreases,” says Sobel.

He says this is because if there is no real estate transaction then there is no due diligence being done. “No inspection was done. The seller didn’t disclose if things were working,” explains Sobel.

What does a home warranty cost? Sobel says they average about $400 across the nation with a flat service fee ranging anywhere from $50 to $100 per call.

Who pays for it? This can vary from state to state, depending on market conditions. “In today’s environment, the buyer has more leverage so we’re seeing the seller pay for it more often,” says Sobel.

Know before you buy.

A few key steps can help you decide which company to use to purchase a home warranty.

  
• Make sure the company is licensed in the state that the home is in. 
• Verify that the company is real — sounds obvious, but lots of scams occur when some consumers find the company online and then don’t bother to confirm that the company is more than just a website. 
• Call the company and ask for referrals. Find out what other customers are saying about their experience with the company. 
• Don’t fall for gimmicks. “If a company is giving you all the coverage that other companies are offering at a discounted rate of 50 percent off, run as fast as you can — it’s too good to be true,” says Sobel. He says all the national companies selling home warranties offer plans that are within a five-to-10-percent price range of each other. 
• If a company offers a gift card or incentive to buy the home warranty, “that’s not a real company. It’s illegal to give incentives to buy warranty.

With all the turbulence and losses in stocks and bad economic news in the headlines lately, you can easily lose perspective on what’s really going on in the real estate sector.

For example, new mortgage applications increased last week by 12 percent, according to the Mortgage Bankers Association. Applications from people looking to buy houses with FHA loans were up by 15.3 percent, while applications from purchasers seeking conventional mortgages rose by six and a half percent.

How could that be, with all the grim economic news? Well, remember that there is a huge pent-up demand simmering away out there for housing — especially from first-time buyers who want to scoop up low-priced deals.

When fixed interest rates drop — and last week they were down by a quarter of a percentage point — those buyers start doing the math and getting into the market with offers.

Fixed thirty year rates fell from six and a half percent to 6.24 percent during the week. Fifteen year rates broke below six percent to 5.9 percent, down from 6.14 percent.

Another piece of positive news you may not have noticed: Pending home sales were higher than year-earlier levels for the second straight month — 1.6 percent higher than September 2007 .

Although pending sales contracts were down slightly for the month, in the western states they wee up by 3.7 percent, and now stand at an extraordinary 39.7 percent higher than they were at the same time in 2007.

At the National Association of Realtors’ convention in Orlando, chief economist Lawrence Yun, warned the delegates not to expect a housing recovery overnight, certainly not with unemployment on the rise. But he projected a slow, steady, multi-year upward trend, with 5.02 million total sales this year, 5.3 million for 2009, and 5.6 million for 2010.

Already sales are up significantly in major markets in many parts of the U.S. Yun specifically mentioned the west coast of Florida, the Phoenix area, Virginia, Long Island New York, Kansas City, Minnesota and Idaho.

So here’s the key point to keep in mind as you try to make sense of the headlines: The stock market is NOT the housing market. It’s on a whole different set of tracks. And it’s been in a highly volatile state for more than a month.

Housing, on the other hand, has already endured its painful correction for two and a half years … is now pretty much stabilized … and is slowing moving toward its cyclical recovery.

Winter can pose unique challenges for those trying to sell their homes. Cold weather and the hustle and bustle of the holiday season can keep would-be buyers at bay. That’s why it’s especially important to maintain strong curb appeal throughout the winter months.

Curb appeal, of course, is the first impression one gets from simply viewing the outside of the home. Just as many folks judge a book by its cover, homebuyers draw certain conclusions about a home just from what they’ve viewed outside. Here are some easy tricks to entice buyers to stop by your home and actually step inside.

First, start with the home itself. Remember that all the upgrades inside the house are useless if you can’t get buyers inside. Giving the house a fresh coat of paint or repainting/staining the front door can both make a huge impact. Also, check the condition of the roof and gutters and fix or replace them if necessary. And don’t forget to paint or clean the garage doors and windows.

Secondly, think about sprucing up the front porch. Updating lighting or sconces can really frame the entrance to the home nicely. Also, something as simple as replacing a worn-out doormat can add an element of warmth to a home. Consider placing urns or planters on either side of the front door.

In winter, it’s ideal to use evergreens or colorful poinsettias. Of course, if you’re anticipating a hard freeze, you might need to protect those potted plants by covering them with a blanket, sheet or plastic. And if your street number is located on the porch, be sure that it is easy to see from the street.

Next, address your landscaping. Keep in mind that a clean lawn can go a long way. Make sure to clean up any toys or trash you see and only set out your garbage can or recycling bin on pick-up days. Neatly rake leaves and debris and place your compost pile in the back or side yard; you don’t want anything to distract from the beauty of your home.

If you live in an area that experiences harsh winters, it’s understandable that your yard isn’t exactly going to be lush. But including certain plants into your year-round landscape can help alleviate the drabness of winter. Evergreens, pines, hemlock, spruce and vibrant holly bushes can really shine through the coldest of months. And adding bird feeders to your lawn can attract and provide shelter for wild birds.

It’s also essential to make sure that buyers can reach your front door easily and safely. Repair cracks in the sidewalks and driveway and make sure that all walkways are cleaned, edged and properly illuminated.

Lastly, make sure your prospective buyers can picture themselves living in your house. This means not going overboard on holiday decorations. You want your décor to be tasteful, but not to overpower the home itself. Give the buyer a chance to envision your home in its everyday condition.

It doesn’t require a lot of money to improve your homes curb appeal. But what it does take is careful planning, due diligence and a bit of creativity.

RISMEDIA, Nov. 15, 2008-What is it you want to get done faster-zip through your to-do list, secure a business loan, land a job? Like me, author Samantha Ettus wants to do almost everything faster. She calls herself “time crunched.” She walks fast and talks fast and says technology now requires her to respond fast. Struggling to find work/life balance has led Ettus on a passionate search for how to do things more efficiently. “I feel like if you do things better, they take less time,” Ettus explains to me.

Which is why Ettus has called in the experts. In her book, “The Experts’ Guide to Doing Things Faster,” big names like Virgin Group founder Richard Branson and real estate maven Barbara Corcoran share their strategies for being more efficient in every aspect of life-from home and work to romance and health. Some useful work chapters are “Reduce the Length of Meetings,” “Return Phone Calls” and “Pick Up a Foreign Language.”

One of the busiest people I know of, sports guy Joe Rose, can relate to America’s obsession with efficiency. Rose appears on Miami radio station WQAM-560 in the mornings and TV station NBC6 in the evenings and squeezes in coverage of Miami Dolphins games on weekends.

He says he often feels overwhelmed. What does he want to do faster and better? Use technology, of course. “I would love to use technology to be more efficient and organize myself.”

Rose also wants to reclaim some family time, which gets sacrificed between work responsibilities and charity events. “It’s really hard for me to say no.”

Looks like Rose could use the chapter “Say No” by Tim Draper, founder of a venture capital firm that has heard more than 100,000 business pitches. Draper’s top tip: Depersonalize it, be decisive, do it now!

One of my favorite chapters is Branson’s on “Getting a Loan.” You might remember Branson as the billionaire/adventurer who owns an airline and music megastores.

What you might not know is as a young entrepreneur, he got a loan from an aunt that helped launch his music empire. If you can’t get money from banks, a fast way to pursue your dreams is borrow from people you know, Branson says.

His guidelines include finding someone who supports what you are trying to accomplish and can afford to help. He says you must have a plan for how you’re going to repay the loan, document the debt and repayment plan, make payments on time and keep accurate records.

“Your lender wants you to succeed and will likely be more flexible than a bank to accommodate any misfortunes, as long as you are really trying.” he says.

Now, this may seem like a trivial thing, but surely one of the most inefficient uses of our time is looking for things-a lost pen, elusive car keys, an important document. Ettus tells me the chapter “Find a Lost Object” is one of her favorites.

Personally, I’m amazed by Michael Solomon’s title: findologist.

His advice is to never look for something when you are agitated. He says wait until you are prepared to search systematically by using his 12 steps, one of which is “objects tend to travel no more than 18 inches from their original location.” So, measure 18 inches and search it meticulously.

I admit that often, I feel harried from juggling my coveted responsibilities.

Around me I see families like mine squeezing more and more activities-soccer games, karate lessons, religious school-into their schedules, seeking to fill their lives with more fun and meaningful experiences. The challenge is to maintain a sense of control.

To pull it off, most of us make to-do lists. My obsession with these lists has created a booming business for Day-Timer.

Of course, the chapter “Tackling Your To-Do List” changed my approach. Kate Gosselin, the star of “Jon & Kate Plus 8,” says clear your mind each day before you write your list. Write down main groups of activities or events to accomplish. Highlight the time-sensitive items and start with those. Keep a running list in each category and cross things off as they are completed. Use your to-do list to determine where you can involve other people. (I would bet this is where most of us go astray).

Thrilled with advice from experts, I started to wonder, why are so many people struggling with personal efficiency? I asked Julie Morgenstern, a productivity expert and author of “Making Work Work,” “Never Check E-Mail in the Morning” and “Organizing from the Inside Out.”

“It’s all connected to our ambitiousness,” she says. “We are trying to fit 80 pounds of stuff into a 60-pound bag.”

Now, she says, we have to add being frugal to our already crowded schedules. People have to spend more time balancing their checkbooks and bargain hunting. Morgenstern says she is spending more time teaching people how to prioritize.

I asked Morgenstern if American workers may be too focused on efficiency.

“You don’t want your whole life to be operating at a fast speed,” she says, adding “You want to cherry-pick some things to do quickly so that other things you can enjoy for the quality of the experience.”

Cindy Krischer Goodman is a workplace columnist for The Miami Herald and weekly televisio

Economists at the National Association of Home Builders semi-annual forecast conference predict home prices will hit bottom in the middle of 2009. As evidence, builders point to increasingly affordable prices, new home incentives, fewer housing starts, declining interest rates and pent-up demand. “I’m hopeful that the markets will come to their senses soon,” said Michael Moran, chief economist for Daiwa Securities America.

NEW YORK – Oct. 31, 2008 – Plunging real-estate values have made it an opportune time for older homeowners to give property to their children, while realizing big savings on gift and estate taxes.

They can do this by moving the home out of their estate with a so-called qualified personal residence trust, or QPRT, which allows homeowners to live in a property for many years before passing it on to their heirs. Though the trusts have been around for many years, many estate planners say now could be a good time to set one up since real-estate values have fallen dramatically in many markets.

QPRTs are one of a number of strategies that wealth advisers and estate planners are recommending as clients cope with beaten-down financial markets and a nasty real-estate landscape. The goal: Put beaten-down assets into trusts now and reap benefits from their appreciation outside of your estate. With real-estate values low, executing a QPRT now ensures your estate won’t contain a more-expensive home down the road, which could trigger a costly tax bill for your estate.

Most estate planners say activity on QPRTs remains quiet these days amid uncertainty over the direction of the estate tax and investors’ timidity in parting with assets during a bear market. But these same wealth advisers say conditions could be ripe – now and in the months ahead – for executing these trusts.

By transferring your home into a QPRT (often pronounced CUE-pert) when the value of your home is most likely at a low point, you’re effectively locking in a lower gift-tax amount when you move the home into the trust. And if interest rates move higher in the months ahead, that discount could be even greater because of the special method the Internal Revenue Service uses to compute the home’s gift-tax value.

“We’re probably heading to a time where it might be a perfect storm” of market conditions that make it the time to set up a QPRT, says Janine Racanelli, head of the Advice Lab at J.P. Morgan Chase & Co.

Henry “Terry” Christensen III, a lawyer at McDermott Will & Emery LLP, says his firm executed about 50 percent more QPRTs earlier this year than it did two years ago. Mr. Christensen says that the trusts are especially popular in California and Florida, where home prices have dropped the most.

Here’s how a QPRT works: Say you’re 60 years old and own a $1 million home. You’d like to leave the home to your children, but worry the property could jack up the value of your estate, perhaps pushing it high enough to trigger the estate tax. (The basic federal estate-tax exemption is $2 million per person for 2008, with the top estate-tax rate at 45 percent.)

To move the asset out of your estate, you can put the home into a QPRT for a term of 10 years (terms can be longer or shorter, depending on your situation). For those 10 years, your living arrangements don’t change – you live in the home and pay all the expenses, including property taxes.

Because you’ve given the home to a QPRT, you’ll have to file a gift-tax return that year, but you stand to benefit from a complex IRS formula that actually discounts your gift amount when you move the home into the trust. Assuming that value doesn’t push you over your $1 million lifetime gift-tax exemption, you won’t have to pay taxes at all.

The formula, among other things, considers your age, the IRS’s current applicable federal rate of 3.8 percent, which is the federal interest rate used to set up trusts or loans to relatives, and the 10-year length of the trust. Assuming your home appreciates 4 percent a year, the formula can nearly halve the value of your house for gift-tax purposes.

After 10 years, the home transfers to your beneficiaries, usually your children. At this point, they own the home, and it’s outside your estate and won’t be subjected to estate taxes. In this example, when the QPRT expires, your home is worth nearly $1.5 million. Assuming you live well into your 70s or 80s, it’s likely to be worth even more.

If you wish to remain in the home, you’ll have to pay fair-market rent to your kids, or risk running afoul of the IRS, which could scrutinize your children for allowing rent-free use of the property. When you die, your children keep the house and don’t have to pay inheritance taxes.

In 1986, Tom and Margie Williams of Columbus, Ohio, bought a lakeside cottage on Walloon Lake in Petoskey, Mich., near the northern tip of the state. Over the years, the couple and their three daughters spent summers there and used the spot for Christmas reunions. The home also had some historical value: Built in 1875, it stands in a lakeside community where Ernest Hemingway spent time as a child.

As the Williamses entered their 60s, they sought estate-planning advice, determined to keep a property near and dear to them in the family without burdening their children with a bigger estate-tax bill.

In 1996, the couple turned the $300,000 home over to a QPRT for a 10-year term. At the time, the applicable federal rate was 7.6 percent. The value of the cottage for gift-tax purposes was only about $120,000. The couple were nowhere near exceeding their lifetime $1 million gift-tax exemption, so they didn’t have to pay taxes on the transfer.

In 2006, the home passed to their children, who now collect rent from the couple in exchange for their right to use the home. “I always tell Margie, ‘Check with the landlord,’“ when something goes wrong, says the 73-year-old Mr. Williams.

The Williamses passed more money to their daughters through other maneuvers in the hope that they’ll maintain the home for years to come. “They’ve kept it this long,” says Margie Williams, “and they won’t have to pay the inheritance taxes.”

These trusts have some quirks. If you die before the trust term expires, the home reverts to your estate, nullifying any potential estate-tax savings. Because of this rule, it’s essential to take stock of your age and health when drawing up the trust.

Also remember that a QPRT is an irrevocable trust, meaning you have to give up the home when the term ends. That type of planning can be tricky - it’s sometimes hard to predict what your relationship with your children will be one or two decades down the line, and there’s no guarantee your beneficiaries will let you stay in the house.

Of course, a QPRT makes sense only if you anticipate your assets will exceed the estate-tax exemption when you die. In 2009, that exemption jumps to $3.5 million.

The tax is set to vanish in 2010, and then return in 2011 with a lower $1 million exemption and a 55 percent top rate. But most estate planners are betting Congress will revise the current structure. Both presidential candidates want to keep the estate tax, though with different exemptions and tax rates.

In addition to uncertainty surrounding the estate tax, some estate planners discourage QPRTs at times like these, when interest rates, including the applicable federal rate, are low. That’s because you get a greater discount on your gift-tax value when the rate is higher. But other advisers tell clients not to focus too much on the rate, especially if your home’s value has declined significantly in the past year or two.

“I think the idea that they’re only attractive when interest rates are high is just a myth,” says Natalie Choate, a Boston estate-planning lawyer and author of a widely used book on QPRTs. “If you wait until interest rates are high, it may be too late because of your health or because the house has appreciated dramatically.”

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Let’s take a look at some of the opportunities and positive indicators for the future of Florida’s real estate market.

1. Long-term economic and demographic trends continue to favor Florida. By 2010 it has been forecast that Florida will be the third most populated state in the country. Florida’s population is expected to increase about 75 percent by 2030. Florida demonstrates a long history of strong growth. It has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often it has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic growth such as new jobs and growing incomes.  All of which is good for real estate.
2. People continue to move here. It’s estimated that 900 people move here every day. Based on recent trends, Stan Smith, director of UF Bureau of Economic and Business Research, said he expects Florida to add about 300,000 residents a year during the next two to three years unless there is a recession.
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WASHINGTON – Sept. 17, 2008 – The Foreclosure Prevention Act, which passed in July, allocates $4 billion to cities and states that have been hardest hit by the surge in foreclosures over the last year. Recipients will be able to use the money - which is an addition to the usual funding for the Community Development Block Grant (CDBG) program - to buy foreclosed properties to stabilize property values. Now, the U.S. Department of Housing and Urban Development (HUD) is devising a formula for distributing the funds for communities in need.
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