What does a hot real estate market mean for a prospective buyer/seller?

Laurie Holt • May 24, 2021

We’ve all heard the stories about the house down the street that sold for $50,000 more than the asking price in less than 24 hours. And we’ve heard the tales of heartbreak from home buyers who searched for months and lost out on their dream home because the seller had 10 offers the day it hit the market. Whether you’re a buyer or seller, navigating the hot 2021 real estate market requires the help of a few professionals and a game plan.


On the Seller’s Side


Start with Your Agent

If you’re ready to list your house for sale, it’s tempting to forgo a real estate agent and put a sign in your yard yourself. Afterall, there are more buyers than sellers. Before you run to the hardware store and purchase your sign remember your real estate agent does more than list your property. A seasoned agent can assist you in getting top dollar for your property and help you sort through the multiple offers you expect to receive. They can coordinate showings while you continue on in your busy life. They may also offer wise counsel about the offers you receive (i.e. the highest bidder might not be the best deal).


Be Prepared

If you want to make your closing happen sooner rather than later secure your home’s inspection before you list your house. You won’t have any surprises about items that need to be fixed, and you can present a full picture of the property to the buyers. In a hot market, many houses with problems like an old, leaky roof still sell for top dollar. Your agent can help you decide which issues must be fixed and which ones buyers are usually willing to take on after the purchase. You can also choose the title agent (ahem, that’s your cue to call The Stiles Law Firm). The buyer has the option to choose the title company, but if you’ve already lined one up they likely won’t.


Clean It Up

Although some buyers are willing to take on certain repairs, it will always be worth your time to prepare your property for sale. Spruce up your landscaping. Declutter your living spaces. Do a deep clean before listing and daily cleaning to keep it show ready. And at the top of your list, invest a little to have your home staged if you want a chance to be that property to sells fast and above asking price.


Review Your Offers

If you know you won’t be accepting certain offers let the buyers know quickly so they can move on to the next property. Respond to all your offers in 24 hours. You’ll need to make time in your schedule to speak with your realtor regularly once the listing is live and to review the offers.


Know Where You’re Going

It’s as likely you’ll end up with a cash offer and a faster closing date as it is that you’ll have thirty days to figure out your next move. If you don’t already have a rental or another home lined up, it’s time to make those plans before you put your house on the market.


On the Buyer’s Side


Start with Your Agent

Whether you’re a buyer or a seller the first place to start is with your real estate agent. Talk about what’s important to you in a property and what’s happening in the real estate market. If you aren’t quite ready to buy just yet, let the agent know you’re starting the process. Find out their availability to show properties and how to best schedule your time. If you’re moving from one place to another and will only have a limited amount of time in town to look, schedule that day well in advance.


Browse First

Before you’re ready to buy, take a look at what’s on the market. Make notes about what you love and what you hate. Notice prices and how quickly homes stay on the market in specific neighborhoods. Use this time to get your game plan in place. Take your time. Don’t get caught up in the excitement of a “hot” real estate market and buy a home you don’t love.


Be Prepared

Get preapproved by your lender before you begin looking at properties. Many home sellers won’t even consider an offer if you aren’t approved. And know where you’re willing to compromise. Is that third bathroom really important or do you have to have a large patio?


Make the Best Offer

In a seller’s market, buyers can make the offer sweeter without offering more money. Consider only asking for post-inspection repairs for issues that are estimated to cost more than a certain amount. (But don’t waive the inspection altogether.) You can also offer a rent-back agreement if the seller hasn’t found a place to go yet or let the sellers set the closing timeline.


Have a Plan B

You may not win the first house you make an offer on. The National Association of Home Builders say 64% of homebuyers in 2021 searched for more than three months before they found the right home. And almost half were outbid on at least one property. This means you may need to rent for a while until you find the right home, or if you’re also selling a home work out that lease-back agreement with your buyers.

The hot real estate market has presented challenges for both buyers and sellers. At The Stiles Law Firm, our closing team is here to make sure your closing runs as smoothly and quickly as possible. And we make your closing a celebration.


Tax Implications and Benefits of Home Ownership

By Laurie Holt • February 27, 2023
I recently had a client reach out and ask what if any tax breaks they would qualify for if they purchased a home. Given the state of the real estate market, I know many prospective homebuyers are looking right now for any kind of financial cushion. With that in mind, I thought I would share with you the good news I gave this client: There are a number of tax benefits that come with homeownership. Take a look at a few key ones below. You can deduct the interest you pay on your mortgage if the amount is over $600–up to a certain limit. You may be able to deduct the amount paid for mortgage insurance . You can reduce how much you owe in federal taxes by deducting your state and local real estate taxes by up to $10,000 in 2022. When you sell your home, you can exclude part or all of the profit from capital gains tax as long as you lived there for at least two of the past five years. People with lower incomes might be eligible for mortgage interest tax credits if issued a qualified Mortgage Credit Certificate from the state or local government. Improvements to your home can also come with tax benefits. You may be able to get a credit for installing certain types of renewable energy improvements like solar water heaters and heat pumps. And if you need to make modifications to your home for medical reasons , like installing a wheelchair ramp, you may be eligible to deduct those costs as well. With that said, if you are considering buying a home or doing a considerable remodel, it’s always a good idea to take note of the tax benefits you might qualify for. If that’s in the cards for you, do not hesitate to reach out if you’d like me to take a look at your unique situation–I’d be happy to see how you might be helped by tax breaks.

Choosing the Right Business Entity

By Laurie Holt • November 21, 2022
When you start a business, you have thousands of decisions to make. One of the most important is how you will classify your business legally. And while you’ve probably heard the terms floating around -- sole proprietorship, partnership, LLC, and corporation -- it’s crucial to understand the differences so you can choose the structure that works best for you. It will impact how much you pay in taxes, the liability you face, and your ability to raise money. Here are a few thoughts I often share with my clients as they make decisions about their new business venture: Sole Proprietorship A sole proprietorship is the most common form of business organization. These businesses’ owners report business income and expenses on their personal tax returns and pay tax on any profit. ADVANTAGE: It's easy to form and gives the owner complete control of the business. DISADVANTAGE: The owner is personally liable for all financial obligations. Partnerships A partnership involves two or more people who agree to share in the profits or losses of a business. ADVANTAGE: Partners do not bear the tax burden of profits or the benefit of losses -- they are simply reported on partners’ individual income tax returns. DISADVANTAGE: Each partner is personally liable for the financial obligations of the business. Corporations A corporation is a legal entity created to conduct business. The corporation becomes separate from those who founded it. The corporation can be taxed, held legally liable for its actions, and make a profit. ADVANTAGE: Corporate status allows owners to avoid personal liability. DISADVANTAGE: The cost to form the corporation and the extensive record-keeping keeps many new business owners from pursuing this option. Setting up an S Corp or C Corp can sidestep some of the liability by allowing income or losses to be reported on individual tax returns (similar to a partnership). Limited Liability Corporation (LLC) An LLC is a hybrid form of partnership that’s growing in popularity. ADVANTAGE: Profits and losses can be passed to owners without taxation of the business itself, while owners are shielded from personal liability. DISADVANTAGE: Compared to a sole proprietorship or partnership, an LLC is a little more expensive to operate. Additionally, owners must keep personal business separate from the business of the company. Now that you know a little bit about the different structures, here are a few questions to ask yourself when choosing one: To what extent do you need to be protected from legal liability? Consider whether your business lends itself to potential liability and, if so, if you can personally afford that risk. Based on your personal tax situation and business goals, where are your opportunities to minimize taxation? Keep in mind there are more tax options available to corporations than to proprietorships or partnerships. What funds do you have for setting up (and running) your chosen business structure? The tax advantages of a corporation may be nice, but they may not be enough to offset the costs of conducting business that way. Note that no two business situations are the same--I’m happy to help guide you based on your personal circumstances. Feel free to give me a call or shoot me an email if I can be of any assistance.

Inheritance and Financial/Estate Planning

By Laurie Holt • September 12, 2022
I wanted to reach out to address something that routinely comes up in financial and estate planning discussions—how to plan for an anticipated inheritance. It can be tough to discuss, but I encourage all my clients to have a plan in place for when (and if) an inheritance comes their way. Here’s some high-level guidance:  If your anticipated inheritance is years away, plan and save for the future as if it didn’t exist. Then, if circumstances change (and believe me, they often do!), you and your family will still be financially secure. If an inheritance is imminent: Identify your current and future financial goals, then use the inherited funds to help you meet those goals. Refrain from spending your inheritance before you have it. Keep from making large purchases before you know precisely what you’ll be receiving. Build a team of professionals to help you reach and stick to your post-inheritance goals. This might include a financial planner, an estate planning attorney, and a tax professional. If you would like to review your financial plans or if you’re in the midst of receiving an inheritance, reach out to schedule a free consultation. I’m here to help however I can.

Medicare Planning Q&A

By Laurie Holt • August 4, 2022
If retirement is a part of your plans in the next several years, congratulations—what an exciting time in life! With that in mind, I want to briefly touch base about one aspect of retirement that is often overlooked: Medicare planning. There is no question that Medicare is complex, but you can make the wisest decisions for your future with the right help and guidance. I’m here to help. To get started, here are a few FAQs about Medicare planning: Isn’t Medicare “automatic” when I turn 65? Why do I need to plan for it? Medicare and how it works with Medicaid is sometimes confusing to understand. If you are nearing retirement age, it’s smart to have a professional guiding you through the process of obtaining the benefits you deserve. What are my Medicare options? The traditional Medicare plan consists of three parts (A, B, and D), each providing different types of coverage. Medicare Advantage and Medigap provide additional coverage levels that allow recipients to receive care from private service providers. When should I begin thinking about Medicare? Medicare planning is best done well in advance of the need for care, particularly if you have assets valued at over $50,000. In fact, there are some simple steps you should take six months before you turn 65 to ensure a smooth transition. Call the Social Security office to confirm your eligibility for Medicare and ensure you have sufficient work history to qualify for premium-free Part A. Consider your potential out-of-pocket expenses on each type of coverage. Compare the out-of-pocket maximums on Medicare Advantage plans in your area. Converse with your doctors to see if they accept Medicare and participate in any Medicare Advantage plans. Will Medicare pay for my assisted-living expenses? While Medicare will pay for 100% of the cost of care up to twenty days at a skilled nursing facility and approximately 80% of the cost up to eighty more days following an inpatient hospital stay, Medicare will not cover the cost of assisted living. There is lots more to cover, but it depends on your unique situation. No question or concern is too small. Give me a call—I don’t want you to miss out on the benefits that you need and deserve.

Post-Divorce Tips for Estate Planning 

By Laurie Holt • April 7, 2022
There’s no question that navigating a divorce can be extremely difficult; there are a handful of important considerations to keep in mind as the dust settles–one of them being your estate plan. I thought I’d reach out and share some insights on a few of the steps to take regarding estate planning after divorce papers have been finalized. Feel free to share this information with anyone you know who may benefit. 1. Update Will and Trust Many married couples have a will or trust that benefits their spouse–and even though the marriage is over, those provisions are usually still in effect until you say otherwise. You’ll need to revoke your existing will or trust and update it to remove your ex-spouse and assign a new heir (or heirs). If you have children under 18, you’ll also need to assign a guardian in the event that you pass away. Typically the surviving parent will get custody of the kids even if you’re divorced, but if they too pass away or are deemed unfit for any reason, you’ll want to have another guardian named. The guardian may also control any money you leave to the kids until they become legal adults, which is something to keep in mind. 2. Redesignate Beneficiaries Many people name their spouses as beneficiaries on life insurance policies, bank accounts, and retirement funds. These types of assets are distributed directly to the beneficiary when you pass away, rather than going through probate court. You’ll need to update your beneficiary forms to remove your spouse and designate a new person to receive those assets. This is typically as simple as requesting a new form from the institution. 3. Reassign Powers of Attorney It’s common for married couples to give one another medical and financial powers of attorney in the event that one spouse is unable to make health-related or financial decisions for themselves. After getting divorced, you may not want that responsibility to remain with your ex. We can easily revoke the powers of attorney and choose someone more suitable, like a sibling or child, to replace them. If you have any questions about this information or would like advice about your estate plan, give me a call and we’ll schedule some time to talk more in-depth. I’m here when you need me.

The Estate Planning Checklist

By Laurie Holt • January 27, 2022
Estate planning can feel overwhelming for those who have never put together a plan or who haven’t reviewed theirs every three to five years as recommended. The good news is that with the help of a specialized lawyer, this process can go much more smoothly and efficiently than many anticipate. In that vein, I thought I would share a general checklist that I send to my clients who are preparing to create or update an estate plan. Beneficiary Designations: Make sure you name a beneficiary for all non-probate assets, including 401(k)s, IRAs, life insurance policies, pensions, and bank accounts. For those who already have an estate plan, it’s important to ensure that the person currently named is still the person you want to be the beneficiary. Financial Power of Attorney: Choose someone you trust who can make financial decisions for you in the event you are unable to do so. Advanced Healthcare Directive: Ensure your medical preferences are followed using a living will. In addition, you’ll want to name a trustworthy friend or family member (often a spouse, parent, or child) as your medical power of attorney. This person will make medical decisions for you in the event you are unable to do so. Name a Digital Executor: I n this day and age, it’s wise to name a digital executor. This person can follow instructions you leave regarding all of your digital assets, such as bank accounts, social media, digital files, photos, and online storage. Proof of Identity: Make sure all of these documents, including your marriage license/divorce certificates, Social Security card, and prenuptial agreements, are in one place and easy to locate. Property Deeds and Titles: Confirm that all deeds and titles are up to date and in an easy-to-locate place–and if you’ve established a trust, make sure to retitle your property to list the trust as the owner Funeral Instructions: Make a list of your preferences regarding your funeral and place it with your will and other important documents. List your preferences, such as whether or not you wish to be cremated, a passage you want someone to read, or a list of preferred charities for donations. Insurance Information: Gather all of your policies and make sure your executor knows where they are and what to do with the information. While this is not an exhaustive checklist, it’s a good jumping-off point to work from in consultation with an estate planning professional. That said, if you have any questions about estate planning or would like to set up an appointment to create or update your plan, please give me a call. I’m here to help.

Why Title Insurance is Important

By stileslaw • June 24, 2021
Chris and Lori are buying their first home. Their realtor talked with them about buying title insurance, but Chris and Lori are on the fence about the purchase. It’s a one-time expense that will prevent Chris and Lori from losing their new home if a problem with the title arises. What is Title Insurance? Title insurance protects the insured from past occurrences. Common types of title insurance claims include: Errors in the public records Undiscovered liens Omitted heirs Fraud When you purchase title insurance, an extensive search of the property’s title is performed. This search minimizes potential liability for the owners by discovering foreseeable title issues. Once the property owner takes possession of the title, title insurance defends against litigation that challenges the validity and legality of the new owners. Here’s a local example that happened in the Memphis area. An elderly woman passed away leaving her assets, including a home, to her daughters. The two daughters sold their mother’s house and split the proceeds. The new homeowners walked away happy with their purchase. Until two years later when a third sister laid claim to the property. In this instance, title insurance would have covered what was owed to the third sister thus protecting the new homeowners. Types of Title Insurance There are two types of title insurance. Mortgagors purchase title insurance to secure security interest in the estate. Property owners purchase title insurance to protect their investment. Title Expense The average title insurance policy costs property owners a one-time payment of $544 while mortgagors pay around $835 for their coverage. Title insurance may seem like an unnecessary expense to some but the protection and peace of mind it offers is invaluable. A one-time cost at closing allows new property owners to enjoy their investment without worry. Your closing attorney plays a vital role in ensuring that you, the new property owner, are fully protected with your investment. The Stiles Law Firm is diligent in protecting our clients and giving them the best experience possible during the purchase of their new home or property. Book your free consultation to learn more.

Why An Estate Plan Matters

By stileslaw • June 10, 2021
Estate plans were once thought of as something for the wealthy. However, many people have discovered that even middle-class families benefit from having an estate plan. What is the difference between an estate plan and a will? A will is a document that states your final wishes and instructions for care for minor children. A will is part of an estate plan but can be used without a plan as well. An estate plan includes a will but it also controls the distribution of your assets. Why do I need an estate plan? If you have any assets to pass onto your heirs, you need an estate plan. A large estate isn’t required to need a plan. Estate planning protects the beneficiaries and gives you control over what happens to your estate when you are gone or become mentally incapacitated. Without an estate plan, the decision of who controls your assets will be decided by a court. This can take months and even years to settle and it can be quite costly for those you leave behind. Your will is one part of your estate plan. We briefly mentioned that a will contains your wishes for who will care for any minor children you may have at the time of your death. Without a will, the courts will decide who will raise your children. The same applies to pets. If you want to make sure Dottie the Dachshund and Pepper the Dalmatian go to someone who will care for them as you do, you need a will. Estate plans also allow individualized plans for each of your heirs. These plans may include instructions for the care of a special needs child and trusts so you can control how and when your heirs receive a financial inheritance. You’ll also include beneficiary forms for bank, investment, and retirement accounts as well as life insurance policies. Keeping all these forms together in one plan allows you and your attorney to ensure the beneficiaries on your accounts and in your will line up. It also makes it easier for your family to know your full assets upon your passing. In addition to keeping the courts out of your final plans, estate planning protects your heirs from a hefty tax burden. You’ll also want to spare your heirs from squabbling with one another over who gets to keep the house and who gets Dad’s classic convertible. Family disputes over left-behind assets can lead to lifelong division among siblings and other relatives. Finally, an estate plan isn’t just for your family after your death, it’s for you while you’re living. Your estate plan should include both durable powers of attorney and a living will. This ensures the person you want to manage your health if you’re incapacitated is in charge and that decisions are made according to your wishes. Don’t wait until it’s too late to decide to create an estate plan. Even young adults should begin planning their estate especially if they have children. Estate planning is even more important for middle-aged adults and the elderly. A critical step in estate planning is choosing the right attorney to handle the legal side of the plan. The attorneys at Stiles Law Firm are highly experienced and ready to help you make the right decisions regarding your final plans. To learn more about how we can help you, book a free consultation with The Stiles Law Firm today.

Protecting assets if you’re in Medicaid’s 5-year look back

By stileslaw • May 22, 2021
When Don, 85, fell and broke his hip, he wasn’t able to return to the home he shared with his wife Gwen, 79. He needed full-time nursing care to help him do the things he was used to doing for ...