Category: Lifestyle

Downsizing in 2020

1/6/2020

Approximately 52 million or 16% of Americans are age 65 and over.  It is easy to understand that some of them are thinking of downsizing their home because they don't need the same space they did in the past.

It can be liberating to divest yourself of "things" that have been accumulated over the years but are no longer needed.  Moving to a less expensive home, could provide savings for unanticipated expenditures or cash that could be invested for additional income.

Savings can be realized in the lower premiums for insurance and lower property taxes, as well as, the lower utility costs associated with a smaller home.

Typically, owners downsize to a home to 2/3 to 50% of their current home's size.  In some situations, it is not only economically beneficial, but their interests may have changed so that a different style of home, area or city might fit their lifestyle better.

The sale of a home with a lot of profit will not necessarily trigger a tax liability.  Homeowners are eligible for an exclusion of $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers who have owned and used their home two out of the last five years and haven't taken the exclusion in the previous 24 months.

Homeowners should consult their tax professionals to see how this may apply to their individual situation.  For more information, you can download the Homeowners Tax Guide.

Call me at 208.946.7816 to find out what your home is worth and what it would take to make the move to another home.

Personal Finance Review

12/17/2019

Even if Benjamin Franklin never actually used the expression "a penny saved is a penny earned", the reality is that it has been a sentiment for frugality for centuries.  He did say: "Beware of little expenses; a small leak will sink a great ship."  At the end of the day, it is not about how much you make as much as it is about how much you keep.

The first step in a personal finance review is to discover where you are spending your money. It can be very eye-opening to have a detailed accounting of all the money you spend.  Coffee breaks, lunches, entertainment, happy hour, groceries and the myriad of subscription services you have contribute to your spending.

This revelation can lead you to obvious areas where savings can be accomplished.  The next step is to dig a little deeper to see if there are possible savings on essential services.

Get comparative quotes on car, home, other insurance.
Review and compare utility providers.
Review plans on cell phones.
Consider eliminating the phone line in your home.
Review plans on cable TV, satellite for unused channels and packages or receivers.
Consider entertainment alternatives for cable like Hulu or Netflix.
Review available discounts on property taxes.
Consider refinancing home ... lower rate, shorter term or cash out to payoff higher rate loans.
Consider refinancing cars.
Call credit card companies to ask for a lower rate.
Consider transferring the balance from one card to a new card with a lower rate and then, pay off the balance as soon as possible.
Review all the automatic charges on your credit cards ... do you need or still use the service?
Discover late fees that are regularly being paid and eliminate them.
Review all bank charges for accounts and debit cards; determine if they can be reduced or eliminated.
Pay your bills on time and avoid all late fees.
Monitor your bank account and avoid over-draft charges.
Some companies have customer retention departments that can lower your rates to retain your business.

A strategy that some people use is to report their credit cards as lost so new cards will be issued. When they are contacted by the companies to get a valid credit card, they can determine if the service is still needed.

The money you save can ultimately help you in the future for a rainy day, an unanticipated expense, a major life event or retirement. Cutting back now will give you more later, possibly, when you need it even more. Tennessee Williams said "You can be young without money, but you can't be old without it."

Downsizing is an Alternative

9/2/2019

It is estimated that over 15% of the population in the U.S. are over 65 years of age. With one of the most common fears of seniors being their money will run out early, it is understandable that downsizing may be strategy to meet their goals.

Once the kids are grown, have careers, relationships and get a place of their own, parents find they may not need their "big" home like they did before. In other situations, their lifestyle might have changed, and the house just doesn't "fit" anymore.

The benefits of a smaller home can include the following:

Easier to maintain
Lower utilities
Lower property taxes
Lower insurance
More convenient location
Single level
Possibly more energy efficient
Possibly lower maintenance

Like any other big change in life, it is recommended that a person should take their time to consider the possible alternatives and outcomes.  Are they going to stay in the same area?  What type of property would suit their needs for the future?

The tax-free exclusion allows a homeowner to take up to $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers.  Part or all of this could be used to generate income for retirement.  Other uses for the equity could include paying off other debt, taking the trip of a lifetime or making a special gift.

There will be expenses involved in selling a home as well as the purchase of a new home.  These will lower the amount of net proceeds you'll have to invest in the new home.

Homeowners should consult their tax professionals to see how this applies to their situation.  Please contact me at  or Jennifer.Ivey@SothebysRealty.com if you have any questions about what your home is worth or how long it might take to sell it.  Other things that could be of value are our Homeowners Tax Guide or Sellers Guide.

To-Do List for Better Homeowners

3/25/2019

Checklists work because they contain the important things that need to be done. They provide a reminder about things we know and realize but may have slipped our minds as well as inform us about things we didn't consider. Periodic attention to these areas can protect the investment in your home.

Change HVAC filters regularly. Consider purchasing a supply of the correct sizes needed online and they'll even remind you when it's time to order them again.
Change batteries in smoke and carbon monoxide detectors annually.
Create and regularly update a Home Inventory to keep track of personal belongings in case of burglary or casualty loss.
Keep track of capital improvements, with a Homeowners Tax Guide, made to your home throughout the year that increases your basis and lowers gain.
Order free credit reports from all three bureaus once a year at www.AnnualCreditReport.com.
Challenge your property tax assessment when you receive that year's assessment when you feel that the value is too high. We can supply the comparable sales and you can handle the rest.
Establish a family emergency plan identifying the best escape routes and where family members should meet after leaving the home.
If you have a mortgage, verify the unpaid balance and if additional principal payments were applied properly. Use a Equity Accelerator to estimate how long it will take to retire your mortgage.
Keep trees pruned and shrubs trimmed away from house to enhance visual appeal, increase security and prevent damage.
Have heating and cooling professionally serviced annually.
Check toilets periodically to see if they're leaking water and repair if necessary.
Clean gutters twice a year to control rainwater away from your home to protect roof, siding and foundation.
To identify indications of foundation issues, periodically, check around perimeter of home for cracks in walls or concrete. Do doors and windows open properly?
Peeling or chipping paint can lead to wood and interior damage. Small areas can be touched-up but multiple areas may indicate that the whole exterior needs painting.
If there is a chimney and fires are burned in the fireplace, it will need to be inspected and possibly cleaned.
If the home has a sprinkler system, manually turn the sprinklers on, one station at a time to determine if they are working and aimed properly. Evaluate if the timers are set properly. Look for pooling water that could indicate a leak underground.
Have your home inspected for termites.

Instead of remembering when you need to do these different things, use your calendar to create a system.  As an example, make a new appointment with "change the HVAC filters" in the subject line.  Select the recurring event button and decide the pattern.  For instance, set this one for monthly, every two months with no end date.  You can schedule a time or just an all-day event will show at the top of your calendar that day.

By scheduling as many of these items as you can, you won't forget that they need to be done.  If you don't delete them from the calendar, you'll continue to be "nagged" until you finally do them.

If you have questions or need a recommendation of a service provider, give us a call at .  We deal with issues like this regularly and have experience with workers who are reputable and reasonable.

Your Real Estate Resource

2/4/2019

Being a better homeowner is a full-time job.  It takes good information to make good decisions not only when you buy and sell but all the years you own a home.

Think of times when you need advice on financing, taxes, insurance, maintenance, finding reasonable and reliable contractors and lots of other things.  Imagine how nice it would be to have a real estate information line you could call whenever you have a question.

Our objective is to move from a one-time sale to customers for life; a select group of friends and past customers who consider us their lifelong real estate professional.  We believe that if we help you and your friends with all your real estate needs, we can earn the privilege to be your real estate professional.

Throughout the year, we'll send reminders and suggestions by email and social media that enhance your homeowner experience.  When we find good articles to help you be a better homeowner, we'll pass them along.  You'll discover new ways to maintain your property, minimize expenses and manage debt and risk.

We want to be your "Go-To" person for everything to do with real estate. We're here for you and your friends...now and in the future.  Please let us know how we can help you

Home Inventory

1/21/2019

Generally speaking, when you need an inventory of your personal belongings, it is too late to make one.  Sure, you can reconstruct it but undoubtedly, you'll forget things and that can cost you money when filing your insurance claim.

Most homeowner's policies have a certain amount of coverage for personal items that can be 40-60% of the value of the home.

Homeowners who have a loss are usually asked by the insurance company for proof of purchase which can come in the form of a receipt or current inventory of their personal belongings.

The most organized people might find it difficult, if not impossible, to find receipts for the valuable things in their home.  Think about when you're rummaging around a drawer or closet looking for something else and you discover something that you had totally forgotten that you had.

An inventory is like insurance for your insurance policy to be certain that you list everything possible if you need to make a claim.  Systematically, make a list of the items by going through the rooms, along with the drawers and closets.  In a clothes closet, you can list the number of shirts, pants, dresses and pairs of shoes but higher cost items should be listed separately.

Photographs and videos can be adequate proof that the items belonged to the insured.  A series of pictures of the different rooms, closets, cabinets and drawers can be very helpful.  When video is used, consider narrating as it is shot and be sure to go slow enough and close enough to see the things clearly.

For more suggestions and an easy to use, interactive form, download a Home Inventory, complete it, and save a copy off premise, either in a safety deposit box or digitally in the cloud if you have server-based storage available like Dropbox.

Before You Leave Town...

7/24/2018

Along with all the planning of what you're going to do and where you're going to stay, consider this checklist to make you feel more comfortable while you're away from home.

Ask a trusted friend to pick up your mail, newspaper and keep yard picked up to avoid an appearance of not being at home.
Stop your mail (USPS Hold Mail Service) and your newspaper.
Don't post about your trip on Facebook and other social media until you return; some burglars look for this type of announcement to schedule their activities.
Do notify police or neighborhood watch - especially if you're going to be gone for more than just a few days. Let your monitoring service know when you'll be gone and if someone will be checking on your home for you.
Light timers make it look like someone is home. Set multiple timers for various times to better simulate someone at home. There are plug-in modules for lights and appliances that would allow you to control them from your phone while your out of town.
Do unplug certain appliances - TV, computers, toaster ovens that use electricity even when they're off and to protect them from power surges.
Don't hide a key; burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you're gone while adding a level of serenity to your trip.

Don't Let a Killer In

6/25/2018

Carbon monoxide is a silent killer you don't want in your home but because it is colorless and odorless; you may not even be aware the deadly condition exists. The Center for Disease Control says more than 400 people in the U.S. die annually from carbon monoxide poisoning and over 10,000 require medical treatment each year.

Unmaintained furnaces, water heaters and appliances can produce the deadly gas. In addition, other sources could be leaking chimneys, unvented kerosene or gas space heaters or exhaust from cars or trucks operating in an attached garage.

The Environmental Protection Agency suggests the following to reduce exposure in the home:

Keep gas appliances properly adjusted
Install and use an exhaust fan vented to the outdoors over gas stoves
Open flues when fireplaces are in use
Do not idle car inside garage
Have a trained professional inspect, clean and tune-up central heating systems annually

Headaches, nausea, vomiting, dizziness and feelings of weakness or fatigue are a few of the most common symptoms. Lower levels of exposure to carbon monoxide may be mistaken for the flu.
Carbon monoxide alarms should be on every level of a home and especially, in sleeping areas. The alarms can be purchased for as little as $25 and plugged into the wall like a night light.
Regardless of the government requirements, no one would want to put their family, guests or themselves at risk for something so deadly.

A Home for Tomorrow

5/14/2018

As people near or enter retirement, one of the decisions that typically comes up is whether to sell their "big" home and buy a smaller one. If you know anyone who has been faced with that situation, selling one home and buying a smaller one may not save enough money to make it worthwhile.

There are sales expenses on the property being sold and acquisition costs on the replacement home. Generally speaking, homeowners may not mind a home with less square footage, but they usually don't want to give up amenities or locations that they've become accustomed.

After a little number crunching, the move may not make enough difference in savings and they end up staying in their current home even if it doesn't fit their needs anymore.

What if while this couple were still in their peak earning years, they acquired a home in an area where they would consider retiring and rent it during the interim. They could put it on a 15-year mortgage and possibly, even accelerate the principal payments to have it paid off by their anticipated move.

In the meantime, they could continue living in the "big" home until it is time to make the transition. Sell the "big" home that may be paid for by then and avoid up to $500,000 of capital gain. Take part of the proceeds and remodel the rental/transitional home and invest the proceeds for retirement income.

Ideally, the former rental would be mortgage free by this point, so the retirees would not have a house payment. Even if at this point, they changed their mind about retiring to this particular home, they still have a property that acted as a hedge against rising prices and have sufficient equity to purchase something else without using the proceeds from the "big" home.

It is difficult to know what the situation will be years from now when a person retires. It is clearly advantageous to have a plan that allows for options and choices. To find out more about purchasing your retirement home today, give me a call at .

Costs More - Takes Longer

4/23/2018

The one experience that homeowners can agree upon after completing a remodeling project is that it costs more and takes longer than expected. It doesn't really matter that you researched, planned, and received multiple bids, it will, invariably, cost more and take longer than you originally anticipated.

Replacing floorcovering or painting is a project that a homeowner can easily get bids and contract with the workmen directly. A new level of complexity occurs when the project involves more specialized contractors, like plumbers, electricians, carpenters, counters, and others.

Now, a homeowner is faced with dealing with one general contractor who will run roughshod over the sub-contractors or make the decision to do it themselves. Typically, you'll pay more for a general contractor, but the trade-off is that they have the contacts and experience to make things go smoothly.

Subs are notorious for wanting to finish their "part" of the project and move onto to the next job. Sometimes, they're not interested in the "big picture" enough to consider doing things in a way that are best for the overall outcome.

When you start tearing out some things, you find out that there may be unexpected expenses involved. Another common occurrence is that during the project, you get a new thought about changing something else "since it is already torn up anyway." This will add time and money to the job.

There can be the situation that the homeowner doesn't even know the right questions to ask or what to consider when trying to coordinate the different workers. The most detailed timetable can be thrown off track if one set of workers don't show up or finish on time. At best, it delays the project for a few days. At worst, it can delay it for a few weeks because the individual workers may have committed to other jobs that don't allow them to reschedule.

Once the work is done in a professional manner, you're probably going to live with it for years. If it is something you've wanted to do and it will allow you to enjoy your home more, it is worth doing. Just be patient and enter this adventure with the understanding that it will cost more and take longer than you expect.

221 E Sherman Ave
Coeur d' Alene, Idaho 83814

200 Main St
Sandpoint, Idaho 83864

Tomlinson Sotheby's International Realty

Josh Ivey (208) 946-7355
josh.ivey@sothebysrealty.com

Jennifer Ivey (208) 946-7816
jennifer.ivey@sothebysrealty.com

©2016 North Idaho Fine Homes. Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated.

Photo used under Creative Commons from Mary P Madigan