Harrisonblog

A high number of showings is a great sign. It means that buyers are out there, checking out potential new homes. For sellers, it means there is a higher probability that their home will be shown, and in the end, sold! For the past three months, we’ve posted about showing activity at Kline May Realty, and January 2010 is no exception to a growing number of showings in our office.

Last year, our office had 90 showings on the books for January, but a year later in 2010, that grew to 117! We’ve said it before and we’ll say it again… this is a sign that things are turning around in our local real estate market.

When first time home buyers begin thinking about purchasing a home, their first thought is usually, “Can I afford it?” or “Do I have enough money?” These are valid questions, and do need to be answered before you begin your home search.

The first step in the process of purchasing a home should be visiting with a lender or mortgage broker. They will be able to go over your finances with you and determine how much home you can afford.

Important things to keep in mind while gathering your financial information and meeting with a lender:

• You need a steady (and reliable) source of income, and you’ll need to prove that you’ve had a steady source of income for the past 2 or 3 years.
• It, of course, helps to have good credit. (To make sure your credit is good, pay your bills on time, and try to have few outstanding debts!)
• Keep in mind that you’ll have to pay your mortgage bill each month.
• The more money you can put down on a home — AKA, the down payment — the better. More down payment funds equals less of a loan from the bank, and less money you’ll have to pay toward interest throughout the life of the loan.
• You will not only need finances for the down payment, but also for closing costs, which your lender can determine for you. Closing costs include things such as fees, title search, writing the deed, etc.

In essence, the lender determines the maximum loan amount that you can afford through this process (via The Department of Housing and Urban Development, or HUD):

The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, 4 should total no more than 41% of income. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

For more information about the process of buying a home, visit our For Buyers page, or HUD’s Q&A page for home buyers.

When you purchase a home, one of the first things you do is acquire homeowners insurance. (Actually, this is usually done prior to closing so it is set in place the moment you are occupying your new home!) We’ve posted before about the basics of homeowners insurance, and what to expect when you look through your coverage options, but we wanted to move a step further and discuss when and how you might use your insurance.

Lets face it, something tragic could happen to your home. We can lessen the pain of that actually happening by having homeowners insurance, but if something were to happen, how do you know when to file a claim against your policy? Filing claims usually ends up in a higher premium (because the insurance company sees you as more risky). And filing a huge claim — or a lot of little claims — could lead to losing your coverage altogether! Note: almost all insurers use what is called a CLUE Report when researching potential new clients (and sometimes even renewals). This report shows all claims filed within the past 7 years.

The answer is simple: do the math. If it makes sense financially to file the claim, do it. If not, don’t.

Here are some things to keep in mind when weighing the financial facts:

• Get estimates right away to determine how much fixing the problem might cost you.
• Think about your deductible. If the damage is close to the amount of your deductible, it is best to just pay to fix it, and forget about filing a claim. If the damage is a lot higher than your deductible, filing a claim might be worth a second thought.
• Was someone injured in this particular situation? Many times, if someone gets hurt, the issue could escalate into a high-dollar claim. (Think lawyers and hospital bills.)
• Was water involved? Insurers do not like water damage because it usually leads to mold issues in the home.

So, what if you absolutely can’t afford to pay the bill for the damage, but don’t want to file a claim either? According to HouseLogic, “with a short-term loan from your bank or credit union, you’ll probably end up paying less in interest than you’d pay in additional annual premiums.”

Remember, any questions regarding your homeowners insurance should be brought to your insurance agent. If you need an insurance agent, contact us! We can point in the direction of some great local ones.

If you’ve ever met Brant Suter, proud member of The Harrisonburg Homes Team, you know that he is charismatic, fun, exciting, and professional. To prove that he puts a high value on providing quality customer service to his clients, he earned a perfect score on his customer satisfaction surveys in 2009!

What is a customer satisfaction survey, you ask? Each time a transaction is completed at Kline May Realty, the brokerage sends out a survey to the clients that were represented by Kline May. So, each time Brant represented one of the parties at the closing table, his clients were given a survey to complete with questions regarding Brant’s service. 16 of his clients completed their surveys.

Among other things, each customer was asked to rate their REALTOR on the following:

• Services of your agent
• Keeping you informed through the process
• Responding to you in a timely manner
• Agent availability when you specifically needed them
• Agent being honest with you at all times
• Agent following up after your closing
• Agent professionalism and knowledge
• Explaining the contract

To be quite honest, it is practically impossible to get a perfect score for an entire year, but if anyone could do it, it would be Brant, and we are so proud of his accomplishments.

Congrats, Brant!

With the development of the new East Rockingham High School coming to completion, Rockingham County Schools are undergoing some redistricting. At this time, no redistricting changes are planned for the elementary or middle schools for the 2010 - 2011 school year, but the high schools will experience some changes.

East Rockingham High School

• All 9th-12th grade students who reside in McGaheysville Elementary School, Elkton Elementary School, and River Bend Elementary School areas attend East Rockingham High School. (These elementary schools feed into Elkton Middle School.)
• Projected enrollment is 669.

Spotswood High School

• All 9th-12th grade students who reside in Cub Run Elementary School, Peak View Elementary School, and South River Elementary School areas attend Spotswood High School. (These elementary schools feed into Montevideo Middle School.)
• Projected enrollment is 780 (current enrollment is 1315).

Turner Ashby High School

• All 9th-12th grade students who reside in Mountain View Elementary School, Pleasant Valley Elementary School, Ottobine Elementary School, and John Wayland Elementary School areas attend Turner Ashby High School. (These elementary schools feed into Wilbur S. Pence Middle School.)
• Projected enrollment is 1011 (current enrollment is 1109).

Broadway High School

• All 9th-12th grade students who reside in Fulks Run Elementary School, John C. Myers Elementary School, Linville-Edom Elementary School, Plains Elementary School, and Lacey Spring Elementary School areas attend Broadway High School. (These elementary schools feed into J. Frank Hillyard Middle School.)
• Projected enrollment is 1046 (current enrollment is 1093).

Click the map below for a detailed visual on how the redistricting will actually look (this will open as a PDF):

Looking for more detail? Visit the Rockingham County Schools website for more information.

Both the City of Harrisonburg and Rockingham County have reassessed properties in their respective areas, which means your property value may have changed. When your notice of reassessment comes, if you think the City or the County are way off in their reassessment, know that there are ways to appeal your reassessment. Depending on whether you live in the City or the County, follow the steps below for appealing your reassessment.

City of Harrisonburg

1. Grounds for an Appeal: First, you’ll need to provide the assessor with important information, so as much information about your property that you can gather ahead of time, the faster the process will go. Second, you must know that appealing your assessment is not considered a complaint of a higher tax bill. Appealing simply means that you think the property value assigned to your property is incorrect.
2. Procedures and Deadlines: When you receive your notice of reassessment, read the instructions carefully regarding where to start for an appeal, and for the deadlines that must be met for your appeal.
3. Informal Review: Usually the first step in the appeals process is meeting informally with someone in the assessor’s office. This meeting will determine whether or not you have grounds for formally appealing your reassessment.
4. Preparation: Find your property ID number on your reassessment notice, and use this to obtain a copy of your property record from the assessor’s office. Double check all of the information on your property record, and if something is incorrect, gather the information for the appeal. For instance, if the square footage seems wrong, measure it yourself (and perhaps draw a floor plan with measurements to prove your point), or if the style of your home is incorrect, take a photo of your home to prove the correct style. It would also be helpful to gather information about comparable properties in your neighborhood and their assessed values. You can have a real estate broker or the assessor’s office gather information on recent sales for you.
5. Meeting: This is where you will present all of the information you have gathered for the assessor, and you will look it over together thoroughly.
6. Formal Appeal: If you have not reached a conclusion on your appeal with the informal review and meeting, you can move on to higher authorities, which is usually done at the local level. According to the City of Harrisonburg, “Your appeal is more likely to be successful if you present evidence that comparable properties in the same neighborhood are assessed for less than yours.”
7. Additional Levels of Appeal: If you still are in disagreement with the assessed value of your property, it is recommended that you seek legal help to bring the issue further and appeal to an even higher authority.

Need more detailed information? Visit the City of Harrisonburg’s official site for understanding assessments.

Rockingham County

1. A board, called the Board of Equalization of Real Estate Assessments, for Rockingham County, provides citizens with hearings (on an as needed basis) for reassessment appeals.
2. To schedule an appointment, or speak with an assessment official regarding your appeal, contact the Deputy County Administrator. At the time of this publishing, that person is Stephen King, and his email address is sking@rockinghamcountyva.gov.
3. As soon as you receive your notice of reassessment, act quickly! Appeals are timely requests that should be dealt with as soon as possible.
4. As with the City of Harrisonburg, it may also be necessary to gather as much information as possible about your property, what you find incorrect on your reassessment, and comparable properties in your neighborhood, so that when you stand in front of the Board, you’ll have a strong case for appeal. To get you started, visit the Rockingham County GIS system for information on your property, and the properties surrounding yours.

The Farmers Insurance Group has again published their Top Safest Places to Live list, and among small towns in the United States, Harrisonburg ranks #9 out of 20! Just one more reason to relocate to our town in the Shenandoah Valley.

Other towns in close proximity that are ranked include:

• Lynchburg: #6 among mid-sized cities
• Charlottesville: #16 among mid-sized cities
• Winchester: #8 among small towns

According to the Virginia Constitution, all real estate must be assessed at market value, so Rockingham County is performing reassessments again. The last reassessment occurred in 2005, and was effective January 1, 2006. Now that 2010 is here, its time for another round!

County officials actually began reassessing properties about 18 months ago. All sales since January of 2006 were used to assess value, but the most weight was given to those sales that occurred most recently, in 2009.

The results? On average, taxable real estate in Rockingham County has increased by 3.64%. All classes showed an average increase in value as follows:

• Residential: 2.06%
• Multi-Family / Rental: 5.29%
• Industrial / Commercial: 8.52%
• Agricultural: 2.55%

According to Rockingham County, “The taxable value of land increased 11%. Rockingham County has land use valuation, which values agricultural land based on its use. Land use values provide a tax break from the fair market value of the land.”

Interesting fact: 57% of all taxable properties in Rockingham County experienced no increase in value, or decreased in value.

In our last post, we informed you how to claim your first time home buyer tax credit. For those of you who own (or are thinking about purchasing) land in Rockingham County, there may be some tax benefits for you, depending on how you use your land.

If you meet these criteria, you may qualify for a special land use assessment from the County:

AGRICULTURE (CROP OR LIVESTOCK) LAND USE

• Real estate property taxes must have been fully paid for previous year
• Operate (or lease out) the acreage for bona fide agricultural production for the previous consecutive 5 years
• Your farm’s (or lessee’s) gross sales of agricultural products exceeded $1,000 for the previous 5 years
• You (or lessee) filed an IRS schedule F during each of the previous 5 years
• If crops harvested, your crop yield must exceed 1/2 the county’s average yields for the previous 3 years
• You must farm, pasture (or lease out) a minimum of 5 continuous acres (6 acres including residence) titled in the same ownership on the deed for each parcel

FORESTED LAND USE

• Real estate property taxes must have been fully paid for previous year
• You must own 20 acres or more of continuous woodland (21 acres including residence) titled in the same ownership on the deed for each parcel
• The land must be growing a well distributed, commercially valuable forest crop that is physically accessible for harvesting when mature
• You must certify that the land is used in a planned program of timber management

If you qualify for the above, visit Rockingham County’s official website for information about the process of getting your land a special assessment. You can also find information regarding fees and deadlines for assessments, other specific information about land use, and details on rollback taxes.

If you are thinking of purchasing land in Rockingham County, give us a call! We can run a specific search that meets your criteria, and help you through the purchasing process.

*Image credit: chefranden

Tax season is here, and will be gone before we know it! If you used the first time home buyer tax credit in 2009, or are thinking about claiming the extended tax credit this year, you’ll want IRS Form 5405. [Click here to download the form.] For a full set of details about the tax credit, visit the IRS’ web page dedicated to the first time home buyer tax credit.

Remember to talk with your tax professional about claiming this tax credit as well.