DEBBIE BURNESS REAL ESTATE GROUP

When a home goes under contract, many assume it’s a done deal, but in reality, most real estate contracts include contingencies, or conditions that must be met for the sale to proceed. These clauses are designed to protect both buyers and sellers and offer a legal way to exit the agreement if something doesn’t go as planned.

One of the most common contingencies is the home inspection contingency. This allows the buyer to have the property professionally inspected after the offer is accepted. If the inspection uncovers serious issues, such as foundation problems, roof damage, or plumbing concerns, the buyer has the right to negotiate repairs, ask for a price reduction, or even walk away from the deal without losing their earnest money.

Another widely used contingency is the financing contingency, also known as a mortgage contingency. This protects the buyer in case their loan application is denied or the terms change in a way that makes financing impossible. For example, if a buyer loses their job before closing and can no longer qualify for a mortgage, this contingency allows them to cancel the contract without financial penalty.

A third key contingency is the appraisal contingency, which comes into play when a lender requires an appraisal to determine the home’s value. If the appraisal comes in lower than the agreed-upon purchase price, the buyer can renegotiate the deal or cancel it. This protects buyers from overpaying for a property and helps avoid problems with financing shortfalls.

Many buyers who already own a home may include a home sale contingency, which gives them a window of time to sell their current property before being obligated to purchase a new one. If their existing home doesn’t sell within the agreed timeframe, they can exit the deal on the new home without penalty.

Buyers are also protected by title contingencies, which allow time for a title search to ensure the seller has clear ownership of the property. If issues like unpaid liens or unresolved disputes are discovered, the buyer can cancel the contract if they aren’t resolved before closing.

For homes in a community governed by a homeowners association (HOA), buyers often include an HOA document review contingency. This gives them time to review the rules, financials, and bylaws. If they find something that doesn’t align with their needs, like restrictions on short-term rentals or upcoming fee increases, they can opt out of the contract during the review period.

Understanding how these contingencies work, and how they protect your interests, is an important part of any real estate transaction. They create flexibility and safety nets that allow both buyers and sellers to move forward confidently. If you’re unsure how contingencies apply to your situation, it’s always wise to consult a real estate agent or attorney who can walk you through the process and ensure your rights are protected.

For more information, download our Sellers Guide.

1. Take Advantage of Homeowner Tax Benefits

• Mortgage Interest Deduction: Deduct interest on up to $750,000 of acquisition debt (for loans after 2017).
• Property Tax Deduction: Deduct up to $10,000 in combined state and local taxes (SALT).
• Capital Gains Exclusion: Exclude up to $250,000 ($500,000 for married couples) in profit when selling a primary residence, if ownership and use tests are met.
• Energy-Efficient Home Credits: Federal tax credits available for solar, heat pumps, insulation, windows, and more.

2. Lower Your Monthly Housing Costs

• Refinance When Rates Drop: Consider refinancing your mortgage to reduce your interest rate and monthly payment.
• Appeal Property Tax Assessments: If your home’s assessed value is too high, appeal to potentially lower your annual property taxes.
• Bundle Insurance Policies: Save by combining home and auto insurance with the same provider.
• Shop for Home Insurance Annually: Rates and coverage vary�review and compare policies regularly.

3. Reduce Utility Bills

• Conduct a Home Energy Audit: Identify leaks, insulation gaps, and inefficient systems to cut energy waste.
• Upgrade to Smart Thermostats: Save on heating and cooling with programmable or learning thermostats.
• Switch to LED Lighting: Longer life, lower power consumption.
• Seal Windows and Doors: Prevent drafts and reduce heating/cooling loss.

4. Maintain and Protect Your Investment

• Regular Maintenance: Prevent costly repairs with scheduled inspections (HVAC, roof, plumbing, etc.).
• Document Home Improvements: Keep receipts to add to your cost basis for tax purposes when selling.
• Check for Hidden Water Leaks: Early detection prevents mold and expensive damage.

5. Use Your Home for Additional Income

• Rent Out a Room or ADU (Accessory Dwelling Unit): Generate passive income.
• Host Short-Term Rentals (where legal): Use platforms like Airbnb to offset mortgage costs.
• Deduct Home Office Expenses: If you qualify, write off a portion of your home-related costs for business use.

6. Plan for Aging in Place

• Invest in Accessibility Features: Lever-style handles, wider doorways, or a main-floor bedroom can improve safety and long-term livability.
• Consider Reverse Mortgages: For older homeowners with substantial equity, this can provide supplemental income.

7. Improve Enjoyment and Resale Value

• Enhance Outdoor Living Spaces: Patios, landscaping, and lighting can boost both daily enjoyment and curb appeal.
• Renovate Smartly: Kitchen and bath updates often offer strong returns.
• Paint and Refresh: A fresh coat of paint is one of the most cost-effective upgrades.

In real estate negotiations, it’s not uncommon for both buyers or sellers to include expiration dates on offers and counteroffers. These deadlines serve several important purposes that help keep the process efficient, transparent, and fair to both sides.

First and foremost, expiration dates create urgency. They encourage the other party to respond within a specific timeframe rather than leaving the offer open-ended. Without a clear deadline, one side could be left waiting indefinitely, which can cause unnecessary delays or lost opportunities.

Expiration dates also prevent stale offers from being accepted later. Real estate markets move quickly, and a buyer or seller’s circumstances can change rapidly. A buyer who submits an offer today may no longer be in a position to move forward a week later. The expiration ensures that all terms are current and that both parties are negotiating in real time.

From a strategic standpoint, expiration dates help maintain leverage. For example, a seller may give a buyer only 12 or 24 hours to respond to a counteroffer, encouraging them to make a prompt decision rather than shopping around or stalling. It keeps negotiations focused and moving forward.

Another key reason to include expiration dates is to limit exposure and manage commitment. In competitive markets, buyers may be considering multiple homes, and sellers may receive several offers. A defined expiration helps all parties manage timelines and make informed choices.

It’s also important to understand that any offer or counteroffer can be withdrawn at any time before it’s accepted, even if the expiration time hasn’t been reached. However, that withdrawal must be done in the same manner as the offer was made, ideally in writing, to ensure clear communication and avoid legal confusion.

For sellers, it’s critical to manage counteroffers carefully. If you have an active counteroffer with one buyer, you should withdraw that counteroffer in writing before accepting a new offer from someone else. Failing to do so could put you in a position where two different buyers believe they have accepted contracts, creating a potential legal conflict.

In short, expiration dates help clarify intentions, reduce risk, and keep negotiations on track. And understanding how to properly withdraw an offer or counteroffer is just as important. If you’re unsure about the timing or the process, always consult with your real estate agent or an attorney to ensure your rights are protected and the deal moves forward smoothly.

Every home experiences some degree of movement over time, often called settling. It’s a natural part of the aging process for any structure, especially in areas with varying soil conditions, temperature swings, or after the first few years of construction. While minor signs of settling are usually no cause for alarm, some changes can hint at serious foundation issues that deserve immediate attention.

Knowing the difference between normal settling and foundation trouble can save homeowners and buyers from costly surprises and protect the value of the property.

Common Signs of Normal Settling

Minor cracks or imperfections often develop as homes adjust to their environment. These signs are usually cosmetic and not indicative of major structural problems:

• Small, hairline cracks in drywall, particularly around windows, doors, and at the corners of rooms.
• Doors or interior windows that stick slightly during humid months but operate normally as seasons change.
• Tiny gaps between moldings and ceilings or walls, which may appear as wood and drywall expand and contract.
• Fine surface cracks in concrete patios, driveways, or garage floors, usually caused by normal shrinkage over time.

If these issues appear but don’t worsen significantly, they are typically part of a home’s normal life cycle. Regular monitoring is recommended to ensure they don’t develop into bigger problems.

Warning Signs of Foundation Problems

In contrast, some signs point to more serious issues that may threaten the structural integrity of the home:

• Cracks larger than 1/4 inch wide, especially if they appear in stair-step patterns along brick or block walls.
• Horizontal cracks across foundation walls or basement floors, which may suggest pressure from soil or water.
• Noticeable sloping or uneven floors, where rolling objects don’t stay put or walking feels tilted.
• Persistent sticking of doors and windows, along with visible gaps around the frames even after seasonal changes.
• Separation between walls and ceilings or walls and floors, creating visible gaps.
• Detached cabinets or countertops pulling away from walls.
• Water intrusion in basements or crawl spaces, possibly from foundation movement allowing moisture to seep inside.
• Visible bowing or bulging of foundation walls from the outside.

These red flags should never be ignored. If you notice several of these issues, or if existing cracks worsen over time, it’s important to seek an evaluation by a qualified structural engineer or foundation specialist.

For homeowners, spotting issues early can help address problems before they escalate. For buyers, hiring a thorough home inspector�and asking questions about any visible concerns�is critical before finalizing a purchase.

A home is one of life’s biggest investments. By understanding the difference between everyday settling and foundation trouble, you can better protect your property, your wallet, and your peace of mind.

Losing a spouse is a deeply emotional experience and the financial decisions that follow can feel overwhelming. One important area to understand during this time is how the IRS treats the sale of a primary residence after the death of a spouse. Under certain conditions, surviving spouses may qualify for a larger capital gains exclusion, up to $500,000, if the home is sold within a specific time frame.

Here’s what you need to know.

1. The $500,000 Capital Gains Exclusion: The Two-Year Rule

In general, married couples who file jointly can exclude up to $500,000 of capital gains when selling their primary residence. For surviving spouses, this higher exclusion amount can still apply, but only if the home is sold within two years of the spouse’s death.

This special provision offers some breathing room for surviving spouses, allowing them time to make thoughtful decisions without immediately losing the tax advantage.

To qualify, the following conditions must be met:

• The home must be sold within two years after the spouse’s death.
• The surviving spouse must not have remarried before the sale.
• The couple must have owned and lived in the home as their primary residence for at least two of the five years prior to the date of death.
• Neither spouse can have excluded gain from the sale of another home within the two years before the current sale.

2. Step-Up in Basis: A Hidden Tax Benefit

In addition to the potential $500,000 exclusion, surviving spouses may also benefit from a step-up in basis. This means that the cost basis of the home, the amount used to determine capital gain, may be adjusted to reflect its fair market value on the date of the spouse’s death.

This step-up can significantly reduce or even eliminate capital gains taxes on the sale of the home, especially if the property had appreciated substantially during the couple’s ownership.

See an example below

3. Selling After Two Years: What Changes?

If the home is sold more than two years after the death of a spouse, the surviving individual is generally treated as a single filer and may only exclude up to $250,000 of capital gains�half the amount allowed under the two-year rule.

While the step-up in basis may still apply, the lower exclusion amount means that timing the sale could have a major impact on potential tax liability.

Important Reminders:

• The exclusion only applies to a primary residence; not to vacation homes, rentals, or investment properties.
• State tax laws may differ and should also be taken into consideration.
• Because every situation is unique, it’s wise to consult a qualified tax advisor or estate planning professional for personalized guidance.

For surviving spouses, the IRS offers valuable tax relief in the form of an extended capital gains exclusion and a possible step-up in basis. If you’re navigating these decisions after the loss of a spouse, understanding the two-year window and how the rules apply can help you maximize your financial outcomes.

Thoughtful timing and expert advice can make all the difference. For more information, contact your tax consultant. Your REALTOR� can help establish a fair market value at time of death and answer any marketing questions you may have.

Here’s a step-by-step example using your scenario to illustrate how the step-up in basis and the $500,000 exclusion work together for a surviving spouse:

Scenario:

• Original Purchase Price: $350,000
• Capital Improvements Over Time: $100,000
• Adjusted Basis Before Death: $450,000
• Fair Market Value at Date of Death: $1,150,000
• Home Sold by Surviving Spouse Within 2 Years: Yes
• Sale Price (assumed equal to FMV): $1,150,000

Step-by-Step Calculation:

1. Determine the Stepped-Up Basis

In most states, if the property was owned jointly and both spouses were on title, half of the property receives a step-up in basis to the fair market value at the date of death. The other half retains its original basis. (Note: in community property states, 100% of the property may receive a step-up. This example assumes a non-community property state.)

• One-half stepped-up to FMV: � � $1,150,000 = $575,000
• One-half retains original basis: � � $450,000 = $225,000
• Total Adjusted Basis After Death: $575,000 + $225,000 = $800,000

2. Calculate the Capital Gain on Sale

• Sale Price: $1,150,000
• Adjusted Basis (after step-up): $800,000
• Capital Gain: $1,150,000 … $800,000 = $350,000

3. Apply the Capital Gains Exclusion

Since the surviving spouse sold the home within two years, meets the ownership and use test, and has not remarried, they qualify for the $500,000 exclusion.

• Capital Gain: $350,000
• Exclusion: Up to $500,000
• Taxable Gain: $0

Result: Because the $350,000 gain is fully offset by the $500,000 exclusion, no capital gains tax is owed on the sale of the home. By taking advantage of the stepped-up basis at the time of the spouse’s death, and selling within the two-year window, the surviving spouse eliminated any taxable gain.

A temporary buydown is a great tool to help ease into homeownership with lower initial monthly payments, especially helpful in a high-rate environment. It allows you to enjoy reduced payments in the first one to three years of the loan, offering financial flexibility as you settle into your home.

With a buydown, the upfront cost is used to offset the difference between your actual mortgage payment (based on the full note rate) and the reduced payment you’re allowed to make under the buydown terms. That difference is funded by a lump sum, typically paid by the seller, builder, or sometimes the borrower, and held in an escrow account by the lender or servicer.

For example, in a 2-1 buydown, the lender still loans the full amount at the note rate for the entire term of the mortgage. However, for the first year, the borrower makes payments as if the rate were 2% lower, and in the second year, 1% lower. The escrow account makes up the difference between what the borrower pays and what the loan actually requires, ensuring the lender receives the full payment due.

But What If You Sell or Refinance Before the Buydown Period Ends?

Here’s the good news: If you sell or refinance the home before the buydown period is over, the unused portion of that escrow fund doesn’t disappear, it typically comes back to you.

Since the funds were set aside to reduce your mortgage payments and you’re no longer making those payments, the remaining balance in the buydown account is credited back to you at closing. It’s your money, or a seller or builder credit given on your behalf, and once it’s no longer needed for payment support, it returns to you.

It’s always wise to confirm the terms with your lender or loan servicer, but most buydown agreements include this provision.

The Bottom Line

A temporary buydown offers upfront savings and long-term flexibility. And if your plans change, whether you sell or refinance early, you won’t lose the benefit of the unused funds. It’s just another way this strategy helps you manage your mortgage more efficiently, while keeping more money in your pocket.

If you’re buying a home�or already own one�home insurance might not be the most exciting part of the process. But it is one of the most important.

In many cases, home insurance is required to secure a mortgage, but even if it weren’t, having the right coverage in place protects one of your biggest financial investments. It’s not just about meeting lender requirements�it’s about safeguarding your future.

Protection Against the Unexpected

Home insurance helps you recover financially if disaster strikes. Whether it’s a fire, storm, or burglary, insurance can help you repair, rebuild, or replace your home and belongings. Some policies even provide protection if someone gets hurt on your property or if you’re faced with a liability lawsuit.

Support During Displacement

If your home becomes temporarily unlivable due to a covered event, insurance can help with additional living expenses, like hotel stays and meals, while repairs are being made. That means one less thing to worry about during a stressful time.

Choosing the Right Coverage

Homeowners can choose policies based on how much coverage they want:

• Actual Cash Value: Pays what your property is worth now, factoring in depreciation.
• Replacement Cost: Covers the cost to replace items with new ones of similar kind and quality.
• Extended or Guaranteed Replacement: Offers a buffer or full coverage to restore your home completely, even if costs exceed the original policy limit.

Knowing your options helps ensure you’re covered the way you want to be�not underinsured when it matters most.

A Resource Worth Reading

For a helpful guide, check out the Homebuyers Insurance Handbook, created by the Insurance Information Institute and the National Association of REALTORS�. It walks you through what to look for in a policy and how to determine the right amount of coverage for your situation.

What Does Homeowner’s Insurance Typically Cover?

• The structure of your home
• Personal belongings
• Landscaping or property features
• Medical payments for guests
• Liability protection
• Temporary housing expenses

Whether you’re closing on your first home or reassessing your current policy, home insurance offers peace of mind, so you’re prepared for life’s "what ifs." It’s not just about protection; it’s about confidence in your investment.

When financing a home, the 30-year fixed-rate mortgage is often the go-to option because of its lower monthly payment. But for buyers who can comfortably afford a higher payment, the 15-year mortgage deserves a closer look and may lead to significantly greater financial rewards over time.

Let’s compare two scenarios based on a $360,000 mortgage with current rates:

• 30-year mortgage at 6.58%
  Principal and interest: $2,294.42/month
• 15-year mortgage at 5.69%
  Principal and interest: $2,977.92/month

At first glance, the 15-year loan costs about $684 more per month. But when you look at where that money is going, and what it saves you, it starts to make a compelling case.

Interest Savings and Faster Equity Build-Up

The key difference lies in how much of your payment goes toward the principal balance. With the 15-year loan, you pay less interest over time and you pay it off faster.

After 10 years:

• On the 30-year loan, you’d still owe $305,804.
• On the 15-year loan, your balance would be just $155,189 – almost half.

That means you’ve paid down far more of the loan and built significantly more equity in your home, which increases your financial flexibility and net worth. Paying an extra $684 per month for 10 years adds up to $82,080, but the 15-year mortgage reduces the loan balance by $150,615 more than the 30-year option, resulting in a net equity gain of nearly $68,535.

Other Long-Term Advantages

• Lower total interest paid: Over the life of the loan, you’ll save tens of thousands of dollars.
• Faster path to mortgage-free living: Paying off your home in 15 years frees up your budget sooner and reduces long-term financial stress.
• Equity growth: Greater equity gives you more options for future borrowing, renovations, or downsizing with more cash in hand.

Yes, the 15-year loan requires a higher monthly payment, but if it fits your budget, the long-term benefits are hard to ignore. You’ll save substantially on interest, build equity faster, and own your home outright in half the time.

Before locking in a mortgage, run the numbers and talk to your lender. If you can manage the higher payment, the 15-year loan could be one of the best financial moves you make. We’d be happy to run an analysis for you or go to our 15-yr vs. 30-yr comparison.

One of the biggest benefits of homeownership is the ability to build equity�the portion of your home you truly own. Equity grows naturally over time in two ways: first, as you pay down your mortgage through regular payments (amortization), and second, as your home increases in value due to appreciation.

But did you know there are smart ways to accelerate that growth? By paying down your mortgage faster, you can significantly boost your equity and financial freedom, often shaving years off your loan and saving thousands in interest. Here are several strategies to help you do just that:

1. Apply Your Tax Refund to Principal – Instead of spending your refund, apply it as a lump-sum payment to your mortgage principal. Even one annual extra payment can make a noticeable difference.
2. Make One Extra Payment Per Year – If you can budget for 13 payments instead of 12 each year, that extra payment goes entirely toward principal and helps you pay off the loan faster.
3. Switch to Biweekly Payments – By making half a payment every two weeks instead of one full payment monthly, you’ll make 13 full payments per year without much strain.
4. Use Annual Bonuses or Commissions – Apply work bonuses or commissions directly to your mortgage. These windfalls can give your principal balance a serious reduction.
5. Round Up Monthly Payments – Round up your payment to the nearest $50 or $100. Small increases add up over time and reduce the overall interest paid.
6. Apply Cash Gifts or Inheritance – Use any financial gift, inheritance, or unexpected income to knock down your mortgage balance and boost equity.
7. Refinance to a Shorter-Term Loan – If you refinance into a 15-year loan and continue paying your current amount (if higher), you’ll speed up repayment and build equity faster.
8. Cut Non-Essential Spending and Reallocate Savings – Track your discretionary spending and redirect small monthly savings toward your mortgage principal.
9. Use Rental or Side Hustle Income – Apply any extra income from side gigs or rental properties directly to your mortgage to build wealth with minimal lifestyle impact.
10. Automate Extra Principal Payments – Set up a recurring monthly transfer to make consistent additional payments without needing to think about it each time.

Your home is more than just a place to live, it’s a powerful investment. By taking proactive steps to grow your equity faster, you open the door to more options later in life, whether it’s refinancing, accessing funds through a home equity loan, downsizing, or enjoying a debt-free retirement. A little extra effort now can pay off in a big way down the road.

Use our Equity Accelerator to make projections and build your plan to retire your mortgage.

There was a memorable Fram Oil Filter commercial years ago where a mechanic asked a customer during an oil change if he wanted to replace the filter. When the customer declined, the mechanic calmly replied, "That’s okay with me. You can pay me now, or you can pay me later." The implication was clear: skipping the small cost of a new filter now could lead to a costly engine rebuild down the road.

That same logic applies to homeownership.

Many people dream of one day having their home paid for free and clear. But how you get there is a matter of choices. You can choose to pay a little more now, or you can pay a lot more later. Those who take the time to make regular additional principal payments on their mortgage are making the decision to "pay now" to avoid the heavier burden of "paying later."

Pre-paying a fixed-rate mortgage will save interest, build equity, and shorten the term of the mortgage. Let’s look at the strategy.

Say you have a 30-year mortgage. By adding even a modest amount, say $100 to $200 per month, to your principal payment, you can shave years off your loan term and save tens of thousands of dollars in interest. This not only speeds up your journey to owning your home outright, it also gives you a greater sense of financial security and freedom.

Imagine entering retirement with no house payment. Your cost of living drops dramatically. You may be able to retire earlier, travel more, help the family, or simply enjoy peace of mind. The effort and discipline it took to make extra payments during your working years can pay enormous dividends later.

On the other hand, choosing to live at the edge of your means, buying more house than you need, skipping extra payments, or refinancing to "reset the clock, can keep you chained to a mortgage well into your golden years. Like the oil filter, the decision to not make a small sacrifice now could result in a much larger cost down the road.

The choice is yours. Do you want to sacrifice a little today so you can enjoy more tomorrow? Or will you consume now and keep paying later?

As the Fram commercial reminded us, the cost is coming either way. The smart ones plan for it. Check out our Equity Accelerator to see what you can save in interest and how soon your loan can be paid off.