Frequently Asked Questions

Table of Contents

1. How do Multiple Listing Systems work ?
2. What are the kinds of Brokerage Relationships ?
3. How can I use my home as a tax shelter ?
4. Why is a home inspection important ... ?
5. What is a comparative Market Analysis ?
6. How are real estate taxes assessed ?
7. What is a 1031 tax deferred exchange ?
(frequently requested phone numbers and websites.)

How do Multiple Listing Systems Work?

The MLS system is a regional tool that allows for all Real Estate Brokers in Summit County to access a central computerized information system for advertising properties that are currently on the market for sale. The MLS system also enables Real Estate Brokers to produce historic data for the purpose of compiling Comparative Market Analysis Reports. The MLS will also produce statistical data on LIST price to actual sales price ratios and average days on market reports.

Back to Top

What are the kinds of Brokerage Relationships

Seller’s Agent: A seller’s agent works and behalf of the seller and will negotiate on behalf of the seller. The agent must disclose all adverse material facts about the property to any potential buyer or tenant. A written listing agreement is required stating the duties and obligations of the broker and the client.

Buyer’s Agent: A buyer’s agent works on behalf of the buyer and will negotiate on behalf of the buyer. The agent must disclose all adverse material facts about the property to any potential buyer or tenant. A written listing agreement is required stating the duties and obligations of the broker and the client.

Transaction-Broker: A transaction-broker works with the seller, buyer or both throughout the real estate transaction with negotiation, advice, contracting and closing. A transaction-broker must make the same disclosures as the agent about adverse material facts, buyer’s financial ability to perform the terms of transaction and whether the buyer intends on occupying the property.

Back to Top

How can I use my home as a tax shelter ?

The IRS allows several tax deductions associated with home ownership. The following items are usually reported on Form 1098, the annual statement you receive from the financial institution holding your mortgage.

Real estate taxes: You may deduct real estate taxes in the year paid. You can also deduct any pre-paid real estate tax collected from you at the closing of your home (as noted on your HUD1 Settlement Statement).

Mortgage interest: The amount of mortgage interest you paid on your residence (or second home) is typically deductible, as are "points" on home mortgages. In addition, any prepaid mortgage interest collected at your closing is tax deductible (also on your HUD1 Settlement Statement).

Local taxes: Local taxes are deductible if they went toward repairs or maintenance (not upgrading) for your existing property.

Back to Top

Why is a home inspection important ... ?

As a buyer, you are entitled to know exactly what you are getting. Don't take for granted what you see and what the seller or the listing agent tells you. A professional home inspection is something you MUST do, whether you are buying an existing home or a new one. An inspection is an opportunity to have an expert look closely at the property you are considering purchasing and getting both an oral and written opinion as to its condition. Beforehand, make sure the report will be done by a professional organization, such as a local trade organization or a national trade organization such as ASHI (American Society of Home Inspection). Not only should you never skip an inspection, but also you should go along with the inspector during inspection. This gives you a chance to ask questions about the property and get answers that are not biased. In addition, the oral comments are typically more revealing and detailed than what you will find on the written report. Once the inspection is complete, review the inspection report carefully. You have to demand an inspection when you present your offer. It must be written in as a contingency; if you do not approve the inspection report, then you don't buy. Most real estate contracts automatically provide an inspection contingency.

Back to Top

What is a comparative Market Analysis

Feel free to contact me for a free Comparative Market Analysis, which will give you insight into what Summit and Park County has to offer. Also, a Comparative Market Analysis can show how many other properties have sold in a particular subdivision, how much they sold for, average price per square foot, how many other properties are currently on the market in that same subdivision or complex, and what price they are listed for.

Back to Top

How are real estate taxes assessed ?

The method used for assessing real estate tax differs depending on your state and/or municipality, but the tax you pay will almost certainly be based, in part, on the assessed value of your home. As a rule of thumb, you can expect to pay the equivalent of 1% to 3% of the market value of your home in annual property taxes. That means if your home is valued at $100,000, you will likely pay between $1,000 and $3,000 a year in real estate taxes. Remember that housing market values are generally adjusted on an annual basis.

Back to Top

What is a 1301 Tax Deferred exchange ?

Section 1031 of the Internal Revenue Code allows an owner of investment property to exchange property and defer paying federal and state capital gain taxes (20%+ applicable state taxes) if they purchase a “like-kind” property following the rules and regulations of the Internal Revenue Code. This allows investors to use all of their proceeds from their sale to leverage into more valuable real estate, increase cash flow, diversify into other properties, reduce management or consolidate into one property.

*The 1031 Exchange Experts 1-866-694-0204

Back to Top