J.J. Ballard's Blog

Downtown Reno Ballroom
November 5, 2011

6:00 PM – 11:00 PM

It’s back and you haven’t seen anything yet!

The 27th annual Fantasies in Chocolate, the black-tie fundraiser that benefits the RGJ Foundation. This year’s event will be held on Saturday, November 5th at the downtown Reno Ballroom. This Fantasies in Chocolate brings a new element to this year’s event by showcasing the elegance and excitement of modern day “Hollywood”! The event, for the first time, will combine two different style of events into one spectacular night.

The night begins with a VIP reception from 6:00 p.m. – 8:00 p.m.. The VIP reception will showcase live entertainment, dinner, award ceremony and wine parings.

General Admission will begin at 8:00 pomp with a Hollywood after party atmosphere with a live DJ and dancing. This sell-out event will draw over 2,000 guests to sample a sumptuous array of chocolates and desserts, as well as wine, champagne and beer tasting, a silent auction, and more!

Guests will be treated to a true Hollywood experience with a spectacular Red Carpet entry, paparazzi, photo ops and best dress and more.

Buyers who purchased during the bubble market often paid too much in competition for a home that needed a lot of work, and then they did few or none of the repairs. In a rising market, buyers were willing to ignore defects and buy “as is” rather than miss out on rapid appreciation.

The opposite is the case today. Home prices have declined an average of 30 percent nationally from the peak. Buyers usually don’t overlook defects, even though the house is still standing and the defects have been there for years.

Today, homes are well-inspected. Defects are taken seriously. Buyers either ask the sellers to do repair work, reduce the price, or credit money to them at closing to help with renovations.

Disclosing property defects is required in most states. The timing of compliance with this requirement is an issue with some sellers.

Sellers don’t want the information made available to buyers before they make an offer for fear that the buyers won’t offer at all if they know the condition of the property. This approach will backfire when the buyers receive the information and the deal falls apart if no agreement is reached on who pays for what.

HOUSE HUNTING TIP: A better approach is to make known as much information as you can about the property condition to the buyers before they make an offer. If you want an “as is” sale, which means you don’t want to take care of any of the recommended repairs, make sure your list price reflects the work that needs to be done.

For instance, if your home has a market value of $450,000 and requires $30,000 of repair work, list it for $415,000. This gives the buyer a $5,000 incentive to take on the project.

There is always the possibility that the buyers’ inspections will find defects that weren’t revealed by the sellers or in any presale reports they provided. But, at least there’s less chance that the deal will fall apart.

A relatively small credit or price reduction will be easier to deal with if the buyers are applying for a mortgage to complete the purchase. Lenders have limits on how much they will allow a seller to credit a buyer at closing.

Check with your loan agent or mortgage broker about the amount of the credit. The lender will probably need an addendum to the purchase price that says the sellers are crediting the buyers a certain amount toward their closing costs.

One way to improve your sale prospects and bypass any lender concerns about property condition is to have work done before you put your home on the market. This requires time and money, so it’s not an option for all sellers.

Items to consider repairing are ones that might keep the sale from closing on time. For instance, if your front porch or back deck is rotted to the point of being a hazard, the lender’s appraiser will indicate this on the appraisal report. The lender will probably require that the work be done before closing. If you can’t line up contractors to complete the work quickly, this could delay the closing.

To save money, some sellers hire unlicensed workers to repair defects. There is potential liability if the work requires a city building permit. Make a list of all the presale work you had completed, who did it and when. Indicate if the person who did the work was licensed or unlicensed. Give the list to the buyers far enough in advance of closing so they can have the work inspected by a professional of their choice if they want to.

THE CLOSING: Selecting less expensive contractors to save money can end up costing you more if they don’t do a complete and proper job.

By Dian Hymer from Inman News

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

Half of refinance applications are abandoned or rejected, as are 30 percent of purchase mortgage applications, according to the Mortgage Bankers Association. All told, the Federal Financial Institutions Examination Council (FFIEC) says that well over 2 million mortgage applications were rejected last year.

Want to avoid falling into that number? It’s tough — especially in light of the fact that mortgage lenders have become increasingly restrictive in terms of their lending guidelines since the housing market crash.

Here, as a cautionary tale and primer on what to expect, are the top six reasons mortgage lenders reject applications.

1. Income issues. Most failed applications falling into this category have income too low for the mortgage amount they are seeking; often, a spouse’s credit issues can create this problem, too, as the income the spouse plans to actually chip in toward the mortgage cannot be considered by a lender.

But increasingly, the recent vagaries of the job market are also causing this issue, as people who have changed their line of work or have changed from salaried employee to freelancer over the last couple of years can also have their home loan applications rejected based on income.

2. Muddled money matters. If the mortgage for which you’re applying plus your monthly payments on credit card, car and student loan debts will comprise more than 45 percent of your total income, you could have problems qualifying for a home loan. You might also run into problems if you rely too heavily on bonuses, overtime, cash wages or rental income — all of these can be difficult or impossible to get a mortgage bank to consider, and if they do, they might not take all of it into account.

3. Credit issues. Today, the mortgage-qualifying FICO score cutoff falls somewhere between 620 and 660, depending on which lender and which loan type you seek. More than one-third of Americans, by some numbers, have credit scores too low to qualify for a home loan. Even if your credit score is high enough to qualify, if you have any late mortgage payments, a short sale, a foreclosure or a bankruptcy in the last two years, loan qualifying could be difficult to impossible.

4. Property didn’t appraise. Since the whole industry had its hand (among other things) smacked for allowing home values to skyrocket in a very short time, appraisal guidelines have tightened up — some would say, even more than overall mortgage guidelines. So, it is increasingly common to have the property appraise for a price lower than the sale price negotiated between the buyer and seller.

This is especially common in the refinance realm, as well over a quarter of U.S. homes are now upside-down, meaning the mortgage balance owed is greater than the value of the home. (If you’re trying to refinance an upside-down mortgage, consider the FHA Short Refi program — contact your lender or get referrals to any mortgage broker who makes FHA details to apply.)

5. Condition problems. With all the distressed properties on the market, and with most nondistressed sellers barely breaking even, more home-sale transactions than ever are falling apart due to condition problems with the property. Many lenders will not extend financing on homes where the appraiser points out problems like cracked or broken windows, missing kitchen appliances, electrical problems, or wood rot.

And in the world of condos and other units that belong to a homeowners association, if more than 25 percent of units are rented (rather than owner-occupied) or more than 15 percent are delinquent on their HOA dues, new applications for refinance or purchase mortgages on units in the development are likely to be rejected.

6. Technical difficulties with application. The days when lenders just took your word for it are long, long gone. Applications with incomplete or unverifiable information are doomed.

If any of these mortgage loan application glitches arise in your homebuying or refinancing process, it’s critical that you connect with your mortgage professional, be it your banker or mortgage broker, to determine what course of action to take.

In some cases, it might be as simple as buying a stove you find at Craigslist and installing it before escrow closes; but with income issues your mortgage pro will need to help you determine whether it makes sense to pay some bills down, get a co-signer, or even wait six months so your income documentation will qualify.

By Tara-Nicholle Nelson, Monday, October 10, 2011.

Inman News™

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

Colder temperatures send wintry pests, such as rodents, spiders and cockroaches, searching for food, water and shelter inside our homes. Mice are a common winter nuisance and only need a space the size of a nickel to enter a home.

To keep these pests outside:

• Seal any cracks and holes on the outside of the home, including utility and pipe entrances.
• Put screens on vents and openings to chimneys.
• Replace loose mortar and weather-stripping around the basement foundation and windows, and at all entry doors.
• Keep attics, basements and crawl spaces well ventilated and dry.

from Old Republic Home Protection email

A common question that we are asked when working with investors contemplating a 1031 tax deferred exchange is:  Can I refinance the property and pull out cash before or after I complete my exchange?  Unfortunately there is no clear cut answer to this question, but hopefully the information in this article will provide you with some clarity. 

 In order to completely defer all tax in a 1031 exchange, you need to acquire property equal to or greater in value than the property you have sold, and you need to reinvest all of the net cash you receive from the sale of the relinquished property.  Because of the rule which requires you to reinvest all of the equity, when you refinance right before or after a 1031 exchange, the IRS may question whether you refinanced to avoid complying with the 1031 rules or whether you did it for a legitimate business purpose. 

Under the step transaction doctrine, the IRS may argue that what you did in several steps (close your exchange as step one and refinance your property as step two) was really all a part of one transaction.  Under that theory, the IRS could take the position that you may be considered to have taken cash boot in your exchange.  If that happens, an exchange that you thought was completely tax-deferred would be at least partially taxable.  It is important to consult with your tax advisor when deciding whether and how to refinance properties that are involved in an exchange. 

Here are a few suggestions that you may want to consider:

• The loan should have a clear business purpose which should be well documented in your files.  For example, the maturity date of the loan may be approaching and you may want to set up a refinance prior to the exchange in case the exchange does not go through.  Other potential business purposes may be to get a lower interest rate or to buy property that is not a part of the exchange. 
• If you schedule your refinance and exchange so that there is as much time in between them as possible, it should make it less likely that you are audited concerning this issue.  It should also strengthen your argument that the refinance was not set up to avoid the 1031 exchange rules.  If you intend to refinance your relinquished property, you may want to refinance it before you list it for sale.  
• Some tax advisors believe that it is better to refinance the replacement property after an exchange rather than to refinance the relinquished property before an exchange.

In any event, it is important to consider the risks and discuss your plans with your tax advisor. 

from the First American Exchange Company October Newsletter “The Exchange Update”

Q: How far can you go back on a contract? Before the closing, the seller was supposed to fix certain outlets that the home inspector had marked. Well, call me an electrical idiot, but I eventually learned that the seller didn’t fix them per the contract. Dumb me for not getting the free second walk-through inspection. I usually learn things the hard way. This is one of them. Any input would be helpful. This was my first home purchase. –Morganne B.

A: More than one thing went wrong in your transaction, from my perspective. Obviously, the seller should have had the outlets repaired — it sounds like the outlets were possibly ungrounded or simply nonfunctioning. However, if that was in writing, you and your agent should have verified that the outlets had been repaired before you removed your inspection contingency — and certainly before you closed the transaction.

Here’s how you can think about — and rethink — these neglected repairs:

1. There’s a no-return policy on homes. OK, that’s not technically true — there is a legal claim called rescission, but courts are extremely hesitant to do that, because real estate transactions just aren’t that simple to undo.

Even if it’s a big fix that needs to be done, unless there was a massive case of fraud on the seller’s part about something that would have changed the normal buyer’s decision-making about the house, or a seller’s signature was forged or something on that order, the chances of “going back” on a contract, so to speak, are between slim and none.

In a court of law, in your case, things could go one of two ways depending, in part, on the laws of your state and the paperwork involved: A judge might order the seller to pay your damages (i.e., the costs of fixing the outlets) or not (you waived your contingencies and so might have taken on liability for the repairs, because you didn’t insist on them being completed while you had your chance).

2. Ask yourself: Are the dollars worth the drama? If you haven’t already had the outlets repaired, get ‘em fixed or, at the very least, get an estimate. [Note -- First things first: if you believed the outlets were in good repair when you closed escrow, you might be able to get your home warranty company to cover the repairs, and you should contact them and inquire about coverage before you do anything else.]

Depending on how many outlets we’re talking, chances are good you’re looking at a few hundred bucks, max. Clearly, a couple hundred dollars is not worth the missed work and drama of a legal proceeding.

If, for some reason, the cost of repairs turns out to run into the thousands, you may want to consider a small claims court case against the sellers, but know going in that even small claims court cases can take tens of hours and hundreds of dollars to file, serve and prepare — and that’s not to mention the missed work of sitting in court for the proceedings and the drama and antagonism that comes with any sort of litigation, no matter how small.

3. Try easy. On real estate condition issues that arise post-closing, I always tell buyers that there’s an easy way and a hard way to address the issue. And though our culture is very fond of telling people to try hard, I suggest trying easy first.

First off, call your real estate broker or agent and tell him what’s going on. Dozens of times, I have seen these issues get resolved with a couple of phone calls and a faxed estimate or repair receipt.

Your broker might turn out to be your advocate in this situation, especially as there’s an argument that he should have advised you against actually removing your inspection contingencies and/or closing the deal unless and until those outlets could be verified to have been repaired.

If that doesn’t work, you or your broker should write the seller a note, through her broker, attaching the contractual documents in which she agreed to complete the repairs, as well as the electrician’s receipt or estimate showing both (a) that the repairs were not done and (b) what the costs of repairs will be or were. Your note should then ask the seller to pay for these repairs.

The chances you’ll recoup your repair costs by trying easy are probably quite a bit better than you think.

If not, assuming those costs don’t quite rise to the level where legal action is cost-effective, you might want to chalk this up to tuition — the cost you pay to learn a life lesson — and be glad this lapse in attention to detail and double- and triple-checking didn’t cost you much, much more.

By Tara-Nicholle Nelson, Thursday, October 6, 2011.

Inman News™

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

Before winter’s bad weather can catch up to you, if you’re having any problems with your roof, this is the time to get those repairs out of the way.

Even when your shingles appear to be holding their own up there, you could have problems with flashings, attic and plumbing vents, and other penetrations into the house that can allow water to enter, creating the potential for big problems down the road.

Repairs begin with an inspection, both inside and outside. You or a qualified, licensed roofing contractor should do a thorough inspection of the roof to examine the condition of several key areas. Look at the attic vents to see if there’s any evidence of cracking, loose or torn screens, loose fasteners or other problems.

Examine plumbing vents for worn, loose, cracked or brittle seals around pipes. Check flashings around chimneys, wood stove flues, siding intersections, skylights and other areas for evidence of loose fasteners, bending, denting, water leaks, or other issues that need to be taken care of.

From inside the attic, look for water staining on the rafters, ceiling joists and roof sheathing that might indicate a possible leak. Also look for areas of insulation that appear crusty on top, or that are flattened out or depressed, indicating that water has been dripping there.

If you spot something, remember that the water leak may not be directly overhead. With roof leaks, water often runs down at an angle from above, so you may have to do a little detective work to trace the leak back to its origin.

Roof vent and plumbing vent replacement

If you find an attic vent that needs to be replaced, first locate a replacement one of the same size. That will help you avoid having to make any changes to the size of the hole that’s already existing in the roof sheathing.

Working from the bottom up, carefully work a flat pry bar between the shingles around the vent to break the tar seal between them. Very carefully — and this is best done when the shingles are warm — lift the upper shingles to expose the nails or staples holding them in place over the vent. Remove the fasteners with your pry bar. Be careful not to bend the shingle too far or you’ll snap it off.

When you’ve exposed the roof vent, you can remove the fasteners that hold it in place and slip it out of position. Install the new vent, and fasten it down with new roofing nails. Reverse the procedure to reinstall the old shingles. To avoid the possibility of additional damage from your hammer, it’s better to use an air-driven nailer or stapler instead of hand-driven nails.

To ensure a good seal, apply a few dabs of roofing cement to the underside of the upper shingle and press it carefully and firmly down onto the new shingle.

Plumbing vents are replaced in much the same manner, except for the fact that you have to slip the vent up and off the pipe.

In some cases this is easy to do, in other cases you may have to cut the pipe in the attic, pull it down through the plumbing vent, replace the old plumbing vent with a new one, and then reinstall the pipe. The pipe can be reattached in the attic with a coupling.

Flashing repairs

Flashings rarely need to be replaced unless they’ve been damaged, such as by a falling tree limb or other impact. Typically, they need only to be refastened and resealed. You can fasten flashings using wide-headed roofing nails, or roofing screws with a washer underneath. Don’t simply drive existing fasteners back into existing holes, as they’ll just come loose again.

After the flashings have been resecured, seal them with a flashing sealant approved for that use. Flashing sealants are available in caulking tubes, and are easy to apply with a standard caulking gun.

New nailer simplifies roof repairs

If you have a lot of roof repairs to do, or if you’re a roofing contractor or handyman who’s often faced with roof repair situations, Duo-Fast recently introduced the Cordless Roofing Coil Nailer (Model DFCR175C, $459) that really makes life easier.

It operates on a combination of a battery and a fuel cell, and drives 1 1/4- to 1 3/4-inch roofing nails without a compressor and hose.

The nailer weighs just 7.5 pounds, and will drive about 900 nails on a fuel cell. Simply slip in the fuel cell and a charged battery, put in a coil of nails, and you’re ready to go. For improved convenience and safety on the roof, the complete kit also includes a backpack that carries the nailer, nails, battery and fuel cell.

By Paul Bianchina, Friday, October 7, 2011.

Inman News™

Remodeling and repair questions? Email Paul at paulbianchina@inman.com. All product reviews are based on the author’s actual testing of free review samples provided by the manufacturers.

Whether you’ve rented your whole life or own a portfolio of properties, you’ve undoubtedly heard the real estate saying, “Location, location, location,” which simply means that a home‘s value is highly dependent upon, well, its location!

The timeless truth of this saying is beyond dispute, even in tough times like these for the housing market. The recessionary fates and foreclosure rates of an individual housing market are highly dependent upon the economic and employment prospects of that market, and even the desirability of an individual neighborhood or lot.

However, there are some other age-old pieces of real estate wisdom that haven’t stood the test of time as well as the location adage. Here are three pieces of conventional real estate wisdom that are due for a refresh.

1. Paying off your mortgage is bad. At the top of the market, many an infomercial pusher espoused borrowing against your home to buy more homes, creating an empire. While that worked for some, for awhile, you can see how that turned out.

But even now, traditional and conservative financial advisers still say that paying off your mortgage is not the best use of cash, as your mortgage interest is tax deductible, and the better use of the funds is to invest them for growth.

For folks who can and are inclined to pay their homes off, though, this rule is off-target. Paying off your home is less about making the most assertive financial move possible, and more about creating security, fixing a low set of living expenses, and hedging against economic and job market uncertainty.

The best practice in today’s economy is to make money moves that create maximum sustainability and minimum stress; if that means paying your mortgage off, then do it.

2. Don’t upgrade your house beyond the level of neighboring homes. Real estate insiders have long observed that buyers are hesitant to pay a premium to buy the best house on an otherwise modest block. And I’ve seen this in full effect, especially when the so-called best house is a three-story castle that has been expanded all the way to the fences, complete with turrets, spotlights and cherub statuary, on a street of one-story ranchers.

Customizing a home with bizarre features, beyond all reason, does make it harder to sell later. But adding features and upgrades that make your life in your home mirror your dream life, or create the comfort and lifestyle your family craves? If you can afford it without draining your home of equity or going into consumer debt, go for it, especially if you plan to be in the property over the long term.

It’s your home, not just another financial asset, and one of the major advantages of ownership is your ability to create a comfortable, personalized habitat for your life.

Don’t necessarily expect to get back your investment in upgrades dollar for dollar, and do avoid making bizarre customizations (hot tub in the living room, anyone?) unless you’re OK with reversing them when you do list the place for sale, but don’t hold back on creating a custom home experience for your family and your lifestyle because you heard it’s a bad investment.

3. The bigger the agent’s car/diamond/hair, the more successful she must be. The real estate industry is a-changing. More than 90 percent of homebuyers start their house hunt on the Internet. And that makes it much harder to tell at a glance who has the stuff to be successful at the endeavor of helping you buy or sell a home.

An agent who drives a Toyota and lacks Kardashian-style bling might even be more likely to have the technology skills it takes to market and sell your home in the Web-centric home marketplace, and to communicate with you via email, text and Facebook message — pick your poison — than the flashiest agent in town. Also, the agents who can hang in there and persevere on tough or small deals on today’s market are often the ones who have manageable expenses of their own.

When picking an agent, disregard your agent’s car, shoes and accoutrements (except maybe their tech tools: laptops, tablets and phones are important tools for them to have and use, prolifically).

So what does matter? Her track record of helping buyers or sellers similarly situated to you (e.g., her list-to-sale-price ratio or history of success at getting bank approval on short sales, if you’re selling a home, or her ability to close deals on bank-owned properties, if you’re buying).

Check prospective agents out by getting referrals from people you know that rave about their agent, checking online real estate forums to see if the agent is participating in online conversations about homes in your area, and asking for references from recent clients who can vouch for the agent’s skills.

By Tara-Nicholle Nelson, Wednesday, October 5, 2011.

Inman News™

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

Most people only call a heating service repair person when their heating system breaks down.  But befoe you turn up th heat, have your system serviced first.

At the very least, a heating contractor should:

• Check thermostat settings to ensure that the heating system turns on and off a the right temperatures.
• Tightena electrical connections and measure voltage and current on motors.
• Lubricate all moving parts.
• Inspect the condensation drain  in your furnace.
• Check system controls to ensure safe operation.
• Show you how to correctly change your air filter.
• Check all gas or oil connections, gas pressure, burn combustions and heat exchanger.

What can you do yourself?

• Change air filters monthly.
• Buy a programmable thermostat – they can save on heating and cooling bills, and the wear and tear of your furnace.
• Seal cracks.  Caulk or weatherstrip any gaps in your home.
• Clean Registers – make sure heat registers are clean and free of foreign objects.
• Keep the area around your furnace clean and unobstructed.

From Fidelity Natonal Home Warranty Newsletter

Q: My parents, who are nearing 70 years old, currently live in a large home they had custom-built when my brother, sister and I went away to college.

They are both retired, and the house is nearly paid off, even though it’s worth much less now than they had expected it to be at this point in time.

But it’s a lot of work for them, they have way too much space, and it’s very costly to maintain and repair — even the basic monthly bills like electricity are extremely expensive.

They just mentioned that they are interested in possibly downsizing to a new home in a 55-plus community.

They can certainly afford the home, if they are able to sell theirs, but I am concerned about the additional costs for homeowners association dues and that this community offers no assisted living or long-term care … facilities for them to move to if and when that time comes. What things should we be factoring in as we help them make this decision? –Alex C.

A: Age 55-plus communities ain’t what they used to be — some of these neighborhoods of vibrant, laughing, silver-haired yoginis, golfers and socialites offer lifestyle amenities so desirable they make some of us 30-somethings a tad bit jealous.

If your parents want to simplify their lives so they have time for the fun they deserve to have at this stage of the game, it’s no wonder one of these areas appeals to them.

Generally, when I’m talking or working with someone your parents’ age who is in good to great financial shape, I don’t push back too hard on lifestyle decisions they want to make.

If they’ve been relatively cautious, have prospered most of their lives, and are generally on sound financial footing, they’re not likely to start making stupid decisions now, nor is now the time to hold back and plan on waiting five or 10 years to do what they want to do.

But you’re correct that there are some important considerations you can help them process.

Here are a few:

1. Selling at the bottom of the market locks in their losses on their current home. Fortunately, they’ll be buying at the bottom of the market, too (see No. 2, below), so it might be less of a financial hit than it seems, at first glance.

But if the projected value of the home was the basis for the rest of their financial and estate plans, selling it now to fund the purchase of the new home might be problematic.

Talk with several, local real estate brokers who have successfully and recently sold homes in your parents’ neighborhood to get an estimate of what the home will sell for, and talk with your parents’ estate planners to revise the math in their plan based on the current market value of their home, the rough purchase price of the new home, and the estimated net change in their monthly expenses — saved maintenance costs and operating costs, offset by the homeowners association dues you’re concerned about — if they move, to understand how the other line items in their retirement plan will change.

2. It might be difficult to resell the home because of limited buyer pool. Homes in senior communities can be somewhat more difficult and take more time to sell than “regular” homes because the buyer pool is smaller and the numbers of retirement-aged people with the money to buy newer homes is limited.

Frankly, though, depending on where they live, it might also be difficult to sell their existing home.Work with a local agent sooner than later to get a sense for the average number of days a home stays on the market in your parent’s neighborhood, as well as to sequence their buy and their sale sensibly.

As such, it’s critical that your parents buy low — taking maximum advantage of the current market dynamics and the cash crunch in which many new home developers find themselves in.

3. Use the financial transaction and the physical home move as an opportunity to have a larger conversation and get organized. Talk with an estate planning attorney about how your parents should take legal title to the home, and how it should be addressed in their legal estate planning documents. Get some clarity on their health care coverage and plans.

Do they plan to age in place (i.e., hire home health care workers), move in with you, or move to a more health care-intensive community or institution? You might be worried about issues they already have resolved; vice versa, they might not even be thinking about these items yet.

Author’s note: Wall Street Journal writer Jeff Opdyke, in his new book, “Protecting Your Parents’ Money: The Essential Guide to Helping Mom and Dad Navigate the Finances of Retirement” (Harper Paperbacks, 2011), offers a thorough coverage of the issues you and your parents can and should discuss and address in the course of this conversation, including all of the above, as well as details like the key documents you and your parents should collect in one place (your parents’ move would be a great time to handle that), how to vet a home health care worker and how to make decisions about the various health coverage options available to them.

By Tara-Nicholle Nelson, Tuesday, September 27, 2011.

Inman News™