All Forum Posts by: Mike Lynch

Thanks Guys!........... We didn't budge much. My Sister is as mean as a snake! After going back and fourth we knocked off $3000.00 from the purchase price. We did offer to pay $1400.00 for some electric work to make the home more safe. ( So $4,400.00 ) Yesterday the due diligence ran out and the buyer can't get his earnest money back now. He says that he wants the home as is. I am very happy. The home does need a lot of upgrades and we just need to get rid of it to please my Sister. ......... I didn't want to rent it and split the rent with my Sister anyway. Doing business with friends and family is a disaster waiting to happen. My Sister and I are good friends and we need to keep it that way. Unless something bad happens, the deal is still a go!

Hi,

My Sister and I are selling my Mother's home, due to her passing away last Sept. My Sister does not want to rent the home. She does not want to hear about keeping it. She just wants rid of it. So, it will be sold.

A man put it under contract several weeks ago. He hired an inspector from 60 miles away. He came up with a 65 page inspection report. Just days before, I was opening the garage door and it worked just fine. After he inspected the house, the cables were completely off of the garage door, so he writes "Garage Door installed improperly and broken"

Then, he says that the bathtub faucet is leaking, but it is not. Unknown odor under home. The home was built in 1963. He says that the chimney has no spark screen. Dishwasher drain not up to code. etc., etc., etc.

He is writing all kinds of things down that are not up to code, but this is the way that the homes were built years ago. Since I am a plumber, I see many plumbing items today that are not done the same ways as in older homes. The codes change year by year. That's why I am constantly going to continuing education every year.

In his huge report he writes: Plumbing, Electrical, Windows, HVAC Ducts, etc., does not conform to today's standards, and needs to be repaired or conform to code by qualified licensed technicians. Now, of course the potential buyer wants a bunch of things brought up to code. I am still trying to understand why he hired a guy from 60 miles away, when we have plenty of inspectors around here.  I tried to do some investigating to see if the inspector and potential buyer knows each other, but so far, I can't find a connection. We really feel like something strange is going on here. What do you think about all of this, from what you have read so far?

We want to list our home this week. My Listing Agent wants me to sign a 1 year contract with a 120 day "Tail" protection period. She supposed to be a really good agent around here, but I need some opinions from you all. 

Hum?????

I have not signed anything yet.

Suggestions?

Thanks Wayne! :)

So, now, if I am understanding this correctly: ...... The 5% includes the 3% as set fourth in paragraph 8, so the grand total is 5%?

Hum,

She wrote 3% of the gross to the buyers agent on the form above. It looks like my listing agent will be getting 2%, or not? I just want to make 100% sure before I start signing things.

Thanks!

Hey, Can you please help me out? ..... My Realtor wants me to digitally sign this contract online. Am I missing something or does the total come out to 8% total? The norm around here is pretty much 6%. Days ago, I asked her if she ever negotiates the commission on a higher priced home and she said that she would go 5%. So, wouldn't that make her 2.5 and the buyers agent 2.5? I don't want to sign anything until I get this sorted out. I have sent you a photo of the contract commission area. This is confusing? .........Thanks!

Thanks!

I called several Accountants today. They told me that on a house flip, we can write off all repairs and upgrades. They said that all materials used in rehabbing the home is like a package deal, so to speak .... Now, if we move into the home and replace a faucet, toilet seat, window blinds, etc., in 6 months, it is not considered part of the rehab anymore and it is just general maintenance...... That's great because we have a ton of receipts for this one rehab project. I was really hoping that we could add all of those to the price that we paid for the home, holding costs, and selling costs so that capital gains would be much lower. 

Thanks!

Hum?

The county government is all involved in this house. No banks would loan any money on it since it was vandalized and had a failed sewer. In order to get a certificate of occupancy, we had to do a lot of repairs. We didn't do anything like install a hot tub, fancy lighting, fancy bidet, etc. We just made the things that need to function, do so, because almost nothing was working. Now, people can get a loan to purchase it..... It would seem that we can write most of our material receipts off because the county literally made us do many of these things in order to get the home up to code.

Hi,

The foreclosed home that we bought over a year ago is about to go on the market this week. It was torn all to pieces when we bought it. Many things needed work and either had to be purchased or rebuilt to new condition. 

According to the IRS: "Most of the work done on houses falls into the repair or maintenance category. Under the Internal Revenue Code, repairs, renovations, and general maintenance of your personal residence are nondeductible personal expenditures"

"For work on a personal piece of real estate to have any tax value, it must add to the property's value or prolong its life. These are classified as home improvements and not general maintenance"

Painting will prolong it's life, otherwise it will rot down. Repairing a faucet or sink prolongs it's life, so that the floors and sub-floors don't rot away from uncontrollable flowing water and leaks, but is considered maintenance.

The IRS says: that working on a kitchen faucet is considered to be 'General Maintenance" and does not add value to our homes.

Hum, well that's confusing! ... If you let a leak go, it will destroy a house, I know since I am a plumber, and it is very common sense. Repairing things will prolong it's life.

This is pretty confusing and very gray to me! On the home that we are selling, we have about $100,000 worth of receipts from Lowe's, Home Depot, Plumbing Stores, Appliance Stores, permits, and contractors etc. So, can we write everything off that we spent to make the home desirable for someone to purchase? We did only what we had to do to comply with the City and get everything in the home in working order to make it habitable and prolong the home's life. We didn't spend all of this money for fun. We had to do what we had to do.

Can you explain some of this stuff and what can be written off for a home flip?

Thanks!