Bill Crawley

Sun Prairie and Down Payment PLus for a home purchase is assistance not restricted to first-time homebuyers. This local program is for homes in the Dane and Grant County areas. Read furthure for more information.

Wisconsin Community Bank is helping to expand home ownership opportunities to low and moderate-income households in our area through Downpayment Plus®, a down payment and closing cost assistance program. Receive up to $6,000 in down payment, closing cost, and rehabilitation cost assistance to purchase a primary residence with a new home mortgage from WCB and a required out-of-pocket contribution of only $1,000. Occupy your new home for five years or sell to an income-eligible purchaser and the full amount of your grant will be fully forgiven.* To qualify for assistance, applicant's total annual household income must be at or below 80% of the area median income as determined by HUD, for example: Maximum $44,950 (1 person household) or $51,400 (2 person household) in Dane County; Maximum $37,200 (1 person household) or $42,500 (2 person household) in Green County. Downpayment Plus® is NOT restricted to first-time homebuyers. Call or click today for free pre-qualification and available mortgage program information.

If your thinking about buying a home in Sun Prairie, Madison or the surounding Madison area. Bill Crawley can help you locate the perfect home for you.

Should I Buy a Home from a Family Member?

A common real estate question I get asked in Sun Prairie is whether or not you can buy a home from a family member. The answer, in most cases, is yes. If the home is current on payments (i.e. not a short sale or foreclosure ), a homeowner can sell the property to any party they choose at a negotiated price. Similar to purchasing a car or other asset from family, there are many possible benefits to purchasing from a relative. Some of these include:

Quick close - Most family members have the opportunity to discuss the purchase face-to-face, and can agree on contract details before involving their real estate agent or title company. This can greatly reduce the amount of resources wasted on counter-offers and amendments and allow for a quick close date. It will also save on title and escrow fees due to the reduction of unnecessary paperwork.

Lower sale price - If you're purchasing from family, chances are they will agree to a lower sale price than if they were selling to someone at arms-length. This is a great perk for buyers who are looking to build immediate equity in their new home. Buyers should be aware, however, that they may run into steep capital gain taxes if they choose to resell the home within a two-year time period.

Alternative or owner financing - If the seller owns the home outright, they may be willing to finance the property for the seller, which is very helpful if the buyer does not qualify for traditional financing due to low savings, poor credit or an untraditional employment history.

While the benefits of purchasing from a family member may be easy to understand, the downsides are not always so apparent. The old saying ôdon't mix business and familyö did not become popular without a reason. Below are just a few of the downsides that arise from this common real estate question.

How to Safely Buy a Home from a Family Member

Purchasing from family can cause friction between relatives from the early stages of negotiation until well into home occupancy. Jealousy from other relatives, buyer remorse and resentment are just a few of the issues that may wreak havoc on family relationships. While these are all common downsides of business transactions, it's important to remember when doing business with family that the business relationship often carries over into personal relationships. If you're considering doing business with family, make sure both parties are aware of these potential pitfalls and understand the risks before entering into a purchase agreement.

Now that you have a clear understanding of the benefits and risks of buying a home from a family member, here are a few tips I recommend to my clients in Sun Prairie when buying from a family member:

Ensure mortgages are current If the home is still financed, be sure that the mortgage payments are in good standing. The last thing you want is a lien put on the home when you are trying to purchase it.

Use a REALTOR® Many realtors are experienced in dealing with sales between family members. If this is the first time you are buying from a relative, your realtor will be able to ask and answer the right questions for you to make sure your sale goes smoothly.

Seek legal advice Make sure you have a lawyer look over all of the paperwork, including the offer, any counter offers and your purchase agreement. They will likely catch something you may have missed, and make certain the appropriate verbiage is in your contract to protect your property investment.

Once you've covered all of your bases, including understanding the risks, benefits and best practices for purchasing a home from a family member, you can be well on your way to entering into an agreement that meets both you and your family's needs.

Home Loan Application and Sun Prairie homes 4 excellent tips to use now

How to Avoid Capital Gains Tax after Selling a Home

Benjamin Franklin stated that the only two certainties in life are death and taxes. While there's little you can do to cheat death when it comes, there are many tax breaks available to homeowners. This article will explain how to avoid capital gains taxes after selling a home.

There are many tax breaks available to homeowners. The Department of the Treasury, Internal Revenue Service Publication 523 explains how to avoid capital gains tax after selling your home. In 2010, you may be able to avoid capital gains tax on the sale of a home up to a profit of $250,000, or $500,000 if you are filing a joint return. If you can exclude all of the capital gains on the sale of your home, you do not need to report the sale on your tax return. Any capital gains that cannot be excluded are taxable and must be reported on Schedule D (Form 1040).

The IRS defines your main home as the one in which you live most of the time. To avoid paying capital gains tax after selling your home, you must have owned and lived in the property for at least two years during the five-year period ending on the date of the sale. These two-year periods of ownership and use do not have to be continuous nor do they have to occur at the same time. In order to avoid capital gains tax after selling a home, the two-year periods of ownership and use only have to both occur within the five-year period before the selling of your home.

In addition to ownership and time lived in the home, the IRS considers other factors in determining whether or not a home is your main home. To determine whether or not you will be able to avoid capital gains tax after selling your home, go to IRS Publication 523 for further description of what is considered your main home.

If you sell the land that your home sits on, but don't sell the home, you cannot avoid capital gains tax on the sale of the land. Department of the Treasury, Internal Revenue Service Publication 523 also explains the criteria for avoiding capital gains tax on the sale of vacant land.

Some taxpayers can avoid capital gains tax after selling a home when additional conditions exist. Exceptions to the ownership and use tests exist under the following conditions.

• There is an exception to the use test in the five years prior to selling a home for individuals with a disability. If a person who has owned or lived in a primary home for a total of at least one year becomes physically or mentally disabled and cannot care for him/herself, the time that he/she lives in a facility licensed to care for people with that disability can count as time lived in the primary home. In order to avoid capital gains tax after selling a home, the disabled person must still meet the two-out-of-five-year ownership test.

• If your previous home was destroyed or condemned you can avoid capital gains tax when selling your replacement home if the ownership and use of the combined homes meet the two-out-of-five-year exclusion.

• If you are a member of the uniformed services or Foreign Service, employee of the intelligence community, or employee or volunteer of the Peace Corps you may be able to avoid capital gains tax after selling a home by having the two-year period of use suspended during qualified official tours of duty of either you or your spouse. By suspending the period of time you were on extended duty you may be able to qualify for the two-year use test even if you did not live in your house during the five-year period prior to the sale of the home.

For more information on how to avoid capital gains tax after selling a home, be sure to check the Department of the Treasury, Internal Revenue Service Publication 523 for further details.

You may want to consult with your local tax professional or financial adviser as well.

Home Appraisal versus Home Inspection

The mortgage settlement process, often referred to as the mortgage closing, can sometimes seem confusing and a little overwhelming. Whether you are buying a new home or refinancing an existing home, there are various fees to be paid and steps to go through. Two steps that are often confused by homebuyers are the home appraisal versus home inspection.

Remember the Difference: Home Appraisal versus Home Inspection

One easy way to remember the difference between an appraisal versus a home inspection is that a home inspection is for your protection. A home inspector will not estimate the value of your home.

Typically, home appraisals are for lenders; home inspections are for buyers.

What is a Home Appraisal?

A home appraisal is a document that provides an estimate of a property's price, otherwise known as its market value. Your home will serve as collateral for the mortgage, so a lender will require an independent appraisal on the property prior to the approval of your mortgage loan application. This is to ensure that the mortgage loan amount is not more than the value of the home and lot you want to purchase or refinance. Most lenders will loan you no more than 95 percent of the appraised value of the home or purchase price, whichever is less.

The person who conducts the home appraisal is called an appraiser. This person will consider several factors in developing the home appraisal, including location, square footage, recent sales of similar properties, and construction quality to estimate the property's market value.

There is a fee associated with getting a home appraisal. Some lenders and brokers will include the appraisal fee in the loan application fee; you can ask the lender for a copy of the appraisal. If you are refinancing and have a recent appraisal of the property, some lenders may waive the requirement for a new appraisal. If you are in this situation, you could save a few hundred dollars by using the existing appraisal.

FHA Loans Appraisal

Many mortgages are insured by the federal government through the Federal Housing Administration (FHA.) The FHA requires lenders to get an FHA loans appraisal on properties prior to loan approval. According to the FHA, they require appraisals for three reasons:

• To estimate the market value of the property.
• To make sure that the property meets FHA minimum property requirements/standards for health and safety.
• To make sure that the property is marketable.

An FHA loan appraisal document will indicate property defects that are easily noticeable and found not in compliance with U.S. Department of Housing and Urban Development's minimum property standards. These defects may not be the same as those items noted in the home inspection report. The estimated cost of a property appraisal is $263 to $444, with a nationwide median cost of $292.

What is a Home Inspection?

There are two types of home inspections, those required by the lender and home inspections initiated by the buyer.

A Lender's Home Inspection

A lender, especially one that offers Veteran's Affairs (VA) or FHA-insured mortgages, may require a home inspection and an analysis by an engineer or consultant to check for things like water damage, termite damage, and the structural condition of the home. In rural areas, lenders may want a test of the septic system (if applicable) and a water test to make sure the well and water system will maintain an adequate supply of water for the house. These water tests usually will check for water quantity, not quality. The health department of the local city government may require a water quality test as well, but this might be done outside of the mortgage settlement process and require a separate payment. Keep in mind that a lender's inspection is for the benefit of the lender, not you. You may want to ask for a buyer's home inspection to make sure the property is in good condition. The cost of a lender's home inspection will likely be between $300 and $500.

A Buyer's Home Inspection

Often, a buyer will make the purchase offer of a home contingent on the results of a home inspection. You will have to pay for this inspection. The cost varies by region, but spending hundreds of dollars could save you thousands.

When you make a purchase offer, sometimes called a binder, contingent on the results of a home inspection, it allows you to cancel closing on the deal if an inspector finds problems with the home or property. If deficiencies are found with the home, you may want to renegotiate for a reduced price or require the seller to make repairs to the home. If you are getting a VA or FHA loan, you will need a certificate from a qualified inspector stating that the home is free from pests such as termites and rodents. In this case, you can also make your purchase offer contingent on pest inspection results.

Similar to the lender's home inspection, an inspector should examine the home for structural soundness, water damage, and pests. In addition to these basic home inspection criteria, you may want to have the home inspection include an examination of the condition of the roof and the plumbing and electrical systems. It is also wise to have the home tested for environmental hazards that may not be visible to the casual observer. This may include testing for radon gas emissions, water quality, asbestos, lead-based paint and other toxic materials. If you are making your purchase offer contingent on the results for environmental hazards, make sure this is stated clearly in the conditions of your offer.

Remember, the easiest way to know the difference between an appraisal versus a home inspection is that an inspection is for your protection!