Flood Map changes article provided by Andy Redpath of Baton Rouge Insurance Agency

Andy Redpath and I were chatting the other day, me grumbling about so many homes in Baton Rouge that are suddenly in a flood zone - homes that were NEVER in a flood zone before and how much it is costing my clients.  He gave me an example of two home owners, not in a flood zone, who thankfully had flood insurance, whose homes received 8 inches of water in the flash rain storm we had last week.  Here is the info he provided me on the floor map revisions:

"With the recent flood map revisions by FEMA, there are a lot of questions being asked by homeowners and new home buyers as how this might affect them. The first question is, are these revisions necessary and why are they being imposed on local parishes. The simple answer can be found with the fact that almost one in four flood claims every year are submitted by property owners that were not in a hazardous flood zone. In other words, they were not required by their mortgage company to purchase flood insurance, but they still flooded and were insured under a preferred flood policy. The good news is that anybody who has recently been determined to be in a hazardous zone can purchase a low cost preferred flood policy for two years before being subjected to the more costly standard rates. At that time they may wish to provide anelevation certificate, if favorable, to reduce their rates. For people who were not remapped to a hazardous zone, they still might wish to consider buying a preferred flood policy. $250,000 of dwelling coverage with $100,000 coverage on contents is only $365 annually.   It only takes an inch of water in your house to ruin your day."

For more information on homeowners insurance and flood policies contact the Baton Rouge Insurance Agency at 293-7350 or at www.bria.net.

Another tip I learned recently.  If you have a termite contract that has the station things all around the house, that coverage is NOT sufficient.  You must also have the perimeter treatment.  We found this out the hard way when termites were found in our door frame.  The termite company told us they had switched a few years ago and found that you need both systems to have the best barrier.  Wish they had told me that sooner!  Check and make sure you have the best coverage offered by your termite company!

Save Money...Be Comfortable

Automatic thermostats can lower your monthly utility costs while conveniently regulating your comfort by adjusting temperatures on your heating and cooling systems. These can be particularly effective in homes with zoned systems where you live in one area during the day but sleep in a different zone.

There are programmable thermostats available at home improvement stores that can make the adjustments for specific times during the day and specific days of the week. They'll allow you to override the setting when needed without tampering with the programming. They'll even remind you to change your filter.

An exciting development is the Wi-Fi enabled thermostat that allows adjustments from any Internet connection such as computer or Smartphone. Imagine how convenient it can be to change your temperature from the car before you get home.

Reasonably priced under $100 for most models, it makes it easy to recapture the cost of the thermostat quickly. Most of the thermostats are designed for do-it-yourselfers; however, you can always have a heating and cooling professional install it for you.

Have You Backed Up Your Home?

Personal computers have been around long enough that everyone has experienced or knows someone who has lost their data due to a hard drive crash, accident or burglary. If they had a backup, the loss was inconvenient but not critical.

Do you have a backup for your personal belongings? Not that you need duplicates of all the items but do you have a journal listing of all the items with a description and their approximate values? That record becomes the backup that supports the claim for your insurance.

If a building sustains a total loss, the insurance company will usually pay the face amount of the policy. When it comes to personal property which might be 40% to 50% of the insured value of the dwelling, the insurance company is going to expect an accounting with receipts or at least, a relatively recent inventory.

The better your inventory, the less likely you'll have difficulty with the claim. Almost everyone has a digital camera that can take stills and probably even videos. The combination of the images as well as a written description will help you replace the belongings and serve as proof to the insurance company.

Once you've made the inventory, store it off site for safe keeping. Online storage in the "cloud" might be the best place to insure you'll always know where it is. Contact me for a free Home Inventory form; it's my way of helping you be a better homeowner.

MID Limited per Residence

A recent U.S. Tax Court ruling clarified the IRS position that the $1.1 million limit for mortgage interest deduction applies per residence and not per taxpayer as some high-priced homeowners were hoping.

A married homeowner filing jointly can have fullly deductible interest on a mortgage of up to $1,000,000 of acquisition debt and up to an additional $100,000 of home equity debt. If the married couple files separately, each party is limited to deducting the interest on half of those maximum amounts.

The court case came about when two unmarried individuals who owned a home together as joint tenants felt that they were entitled to deduct the interest on $1.1 million of debt each. IRS did not agree with their understanding and neither did the Tax Court. The Court ruled that the limits apply per residence, not per taxpayer even if a home is co-owned by unmarried taxpayers.

The result for the taxpayers in this case was that their deduction was cut in half resulting in much more income tax due. While this situation only affects a few taxpayers, homeowners in this position should have a discussion with their tax professional.

1.  Pressure wash and paint the exterior as needed.  You have to pressure wash it once a year and usually paint every 5 years or so.

2.  Rework the landscaping.  Don't keep it so outdated with lots of shrubs.  Pull some out, add some flowering plants, maybe a palm tree or two.  You have to update the outside just as you do the inside.

3.  Get rid of those curtains!!!  I don't care how good the fabric is, if the colors are not current, get rid of them.  This is especially true if the colors are jewel toned, pink, baby blue, peach, or mauve.

4.  Same thing goes for the interior walls when it comes to color.

5.  Update your light fixtures

6.  Yes, I know you have REALLY good 30 year old carpet.  Replace it.

7.  Add wood floors to the den, living room, or dining room.  This will usually be an excellent return on investment!

8.  Change the hardware on the cabinets - change out the faucets - make the home have a fresh, new look.

9.  Remove some clutter.  Yes, we all live with it but let's face it, some of that stuff has to go.  Worst case, take a nice photo of it and make a photo album of all the cool things you are now going to discard!!

10.  Make sure your AC is in tip top condition, that you have a fairly new roof (since Katrina), and that there are no active leaks in the ceiling or under the sinks.

This is a nice start to updating your house while you are still there to enjoy it!

This is one of the most expensive purchases you will ever make.  Trust your home inspection to a licensed inspector so that you have the best chance of getting a total over all view.

And those of you, who like us, have owned your house for several years, might want to have a home inspection done on your own house to see if there are items you should be aware of.  We recently had a structural engineer check out our house as I had seen some movement in the brick.  Well, what I thought was foundation issues were really termite issues - and I never saw the evidence - even though I look for that stuff all the time!!!  The professional recognized it immediately.  Guess that's what they are the professionals!!

If you never need a list of inspectors to call on, just let us know.  We keep a list handy - just for you!

In order to stack the cards in your favor here are a few tips you can try:

1.  Write the seller a letter on why you love their house.  BE SPECIFIC.  

2.  Offer over list price - and I don't mean $500-1000 - although that sometimes will do it.  Make it significant so that the seller has no choice but to choose you.

3.  Don't make the offer subject to the house appraising.  Have the extra cash to cover how high you bid over list price.  

4.  Make your offer 'as is' with no repairs.  Still have your inspection but let the seller know you aren't coming back to them for anything.

During hurricane Katrina we used these tactics and all of our buyers got the house they wanted.  

Remember, shopping for a house is fun, but living in the house you really want is worth a little extra effort!  Looking for a home?  Give us a call today and we'll get you started on that home search!

These low interest rates are not expected to hold indefinitely.  Typically, rates will remain low the year of a presidential election then they tend to trend upward after that - depending on which party wins.  

My team noticed the sales trend the last quarter of 2011 and thought it would hold through the winter, and so far, that's what our real estate market has done.  Don't play the waiting game.  Give us a call and start shopping for  home or investment now!!

Now, I am a horrible buyer.  The house we are in now I had to look at 6 times before I bought it!  Can you imagine why I needed to look at it so often?  Well, it didn't meet two of my criteria.  I needed a big kitchen with a large island and I wanted two fireplaces - one in the keeping room.  My house has a small kitchen with an o.k. sized island and it only had one fireplace.  I'll never forget my husband asking me why I needed a big kitchen since I don't cook!!!  And, he pointed out, if I really had to have a 2nd fireplace, put one in!  So we bought it, I had the 2nd fireplace built plus bookcases on both sides!!!  The house was the right price, the right location, the right size, and full of wonderful amenities.   Since I was very clean on what I wanted it was pretty easy for my husband and me to compromise and get the perfect house!

When searching for the perfect house in the Greater Baton Rouge Area, let my team help you pick out the right home for your next real estate purchase!  Let us save you time and energy - just make a list of what you want in your next house and let us start shopping!

Pat Wattam receiving award from Marti Dittier

Pat Wattam was named REALTOR of the year by the Greater Baton  Rouge Association of Realtors at their annual installation and awards Ceremony!  "I am thrilled to receive this wonderful honor from my peers!" Pat said after the ceremony.    The award is given to the REALTOR who not only is good in sales but also contributes to the board by serving at the local, state, and national levels as well as giving back to the community.

In this age of a stimulus spending and bailouts, 'debt' and 'deficit' are often used to describe the federal government's financial situation.  Many people use these words interchangeably, yet they have significantly different meanings.  

Budget deficit:  When the federal government spends more money in a fiscal year than it collects in tax revenue, it creates a budget 'deficit'.  In the rare instances when the government expenditures are less than tax revenues, the result is a budget 'surplus'.  Budget deficits have been the norm in recent decades.  For example, in the past 28 friscal years (1982 - 2010) , there were only 4 years in which the federal government ran budget surpluses.

National debt:  How can the government spend more than it collects?  By borrowing money.  The total amount owed by the federal government is called the 'national debt'.  Because the federal government guarantees the timely payment of principal and interest, many individuals, corporations, state, and local governments, foreign governments, and others are willing to lend their money.  Although Treasure Securities pay relatively low interest rates, they tend to appeal to investors seeking lower risk.  There's also quite a big of borrowing between federal agencies.  For example, Congress has long been in the habit of borrowing excess Social Security revenues.  As a result, the national debt is divided into two categories:  debt held by the public and intergovernmental holdings. As you can imagine, there's considerable debate over how long the government can keep borrowing to financing spending.  Regardless of how you feel about government spending, you might benefit from understanding the terminology.

Thanks Wally for that enlightenment!

Reading this just makes me think of all our home buyers qualifying for a home loan.  Our federal government couldn't qualify for a home with all the deficit the country has!!  I also equate deficit with debt - you spend more than you make, it's a deficit.  You create debt by owing money.  The less you owe, the more of your income you keep, the wealthier you are!!  It's something to think about as we watch the politicians jockeying for their position before tomorrow!!  Pat

Common Fears:

1.  Don't want to get calls all hours of the night with repair problems, or, don't have any repair skills and the cost to maintain will eat away all profit.  SOLUTION:  place an Old Republic Home Warranty, or other warranty such as AHS, on the property.  If the rent is high enough, have the tenant pay the deductible unless it is a major repair - such as air or heat.

2.  Finding Tenants.  SOLUTION:  We'll help you write you ad and show you how we prospect for tenants for our personal rentals

3.  Property stays vacant too long.  SOLUTION:  Price it competively and make it the prettiest property for the price.

4.  How to price.  SOLUTION:  look in the newspaper and Craig's List to see what your competitors are charging

5.  Where to find a good buy.  SOLUTION:  Let us help you find it.  We ask you questions, find out what your goal is, then help you find the right property!!

Don't be afraid!  You can create financial freedom through the ownership of rental property.  Let us help you make a plan that works for you.  

Call today for a private consultation!  225-298-6900

Baby Boomers and Retirement

Procrastination, timing (bad), and poor financial decisions have caused many 'boomers' to face financial disaster just as they are ready to retire.  The situation is serious because 'boomers' have not saved enough for retirement but still want to retire early.  A recent business report form the Associated Press explains the reasons for concern among 'boomers".

REASONS FOR CONCERN

1.  Pension plans are a thing of the past.  In 1980, 39% of workers had a guaranteed pension payout during retirement.  Today, that number has been drastically reduced to 15%.  pension plans have been replaced by 401 (k) plans. which require the employee to save more for his retirement and do not guarantee a fixed payout during retirement.  Today, 42% of workers have 401(k)s.

2.  "Boomers" relied on their homes for part of their retirement income.  The idea was to downsize before retirement and use the profit to subsidize retirement  income.  In some parts of the country, the crash in housing prices has slashed home values by a third. Locally, however, real estate has only dipped about 11% in 2010 compared to 2009.  We are still 38th in the nation in foreclosures - and this is the one time we like being on the bottom of a list!

3.  Mortgage debt for'boomers' is another problem.  Twothirds of boomers between ages 55-64 have a median mortgage debt of nearly $100,000.

4.  Too many boomers are relying on social security to fund their retirement income - no explanation required.

5.  Health care costs in retirement eat up a higher percentage of income.

6.  The unemployment rate is near 10% and many boomers both WANT and NEED to work longer than pervious generations.

Wally told me that it is never to late for many boomers to start planning.  Here are five areas he suggested to think about and act upon NOW:

1.  Create a plan

2.  SAVE MORE NOW!

3.  Retire later.

4.  Scale back your lifestyle

5.  Delay your social Security Income.

Call Wally if you want to discuss any of these ideas.  He has done a great job for us personally.  225-926-9585

wally.mcmakin@smhgroup.com

1.  Don't Splurge!  It's tempting to buy all kinds of new stuff for the house, but only spend what you have budgeted for it.  Make a list of what you want to do, then as you rebuild your savings, you know what you will want to purchase next!

2.  Rebuild your emergency savings!  This is more important than redecorating!  This should be your first priority.  If you dipped into your reserves to buy the house, then you need to build it back up as quickly as possible to offset any unexpected expenses.

3.  Automate your payments.  Late payments are now even more damaging than ever before.  Automating them insures that your payments are timely and that helps your credit score!

4.  Keep good records.  You'll need receipts and other documents at tax time.

5.  If you home value drops, don't forget to appeal your tax rate.  You can sign up for automated monthly updates on your general location with Market Snapshot.

Using these steps will help get your homeownership off on the right foot.

 However, another part of my financial plan is owning rental property!!  So, if the value of home ownership is over, then ownership of rental property must be high on everyone's list.  People need a place to live, and if they can't own a house, then they have to rent someplace - and why not rent from me......or you!!

Rental property, property owned and managed, is a great way to create financial freedom or a nice retirement income.  Call me today and I will show you how to do this.  We will help find you a home that cash flows in the Greater Baton Rouge Real Estate Market, give you the forms you need to interview prospective tenants, and in general, just show you the way.  We love helping the first time investor learn the ropes.  Don't delay!  Call us today at 225-298-6900!!