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15 Questions to Ask When Interviewing Realtors

Working with a professional real estate agent can make buying or selling a home easier. Chemistry and bona fides become important when you interview agents to find The One. A good fit creates a team for the dealmaking to come.

A Realtor® belongs to the National Association of Realtors®, composed of nearly 1.5 million members. Not all real estate agents are Realtors, but for the purposes of this article, we’ll sometimes use Realtor and real estate agent interchangeably.

While you could buy a house without an agent, working with one could help you avoid common homebuying mistakes. Eighty-eight percent of buyers used a real estate agent or broker in 2019, while 89% of sellers relied on a real estate pro.

In the hunt for an agent, it’s important to know what to ask. This is a lengthy laundry list, so pick and choose questions that resonate the most.

How to Interview a Realtor

First, know that there are different options for interviewing Realtors. You could schedule an interview:

•   Over the phone
•   In person
•   Virtually via Zoom or Skype

You might aim to interview at least three agents for comparison’s sake, though you may choose to interview more or fewer.

Create a list of interview questions beforehand if you’re short on time. And it may help to group your questions together so that by the time the interview is over, you understand:

•   What the agent’s personality and character are like
•   What kind of services they offer and what experience they bring to the table
•   How much you’ll pay for their help

What to Ask About a Realtor’s Background

Any real estate agent you choose to work with should have the professional qualifications you’re looking for. But it’s also important to get a sense of who they are as an individual to avoid personality clashes.

1. How Long Have You Been a Realtor?

It helps to understand how long an agent you’re considering working with has been buying or selling homes. The median real estate experience of all Realtors is nine years, according to NAR.

Working with an agent who’s newer to the profession isn’t necessarily a bad thing. But one who’s more experienced may be more adept at handling any challenges that arise when buying or selling a home.

2. How Well Do You Know the Local Market?

A Realtor who knows a particular area or market well can offer an advantage when buying or selling. Ideally, you should work with an agent who understands the local market and what trends drive it.

The more informed they are, the better equipped they are to do things like comparative market analysis, which can give you a sense of how home prices in the area are trending.

3. How Many Clients Do You Work With at One Time?

The answer can give you an idea of how much time an agent will be able to dedicate to working with you.

The typical Realtor worked 36 hours per week in 2019, so it’s helpful to have realistic expectations going in.

4. How Many Transactions Did You Close Last Year?

Asking this question can give you an idea of an agent’s overall success rate and the volume of transactions they handle.

The median number of residential transactions Realtors took part in in 2019 was 12, so if you’re interviewing agents with closings well below that number, it could be a sign that they aren’t always successful in closing deals.

What to Ask About a Realtor’s Services

Real estate agents can perform a variety of tasks, so it’s helpful to know what those include and how they get done.

5. Do You Specialize in Buying or Selling?

Some Realtors may choose to work exclusively with buyers, while others work only with sellers.

And some can act as dual agents, representing both the buyer and seller in the same transaction. Dual agency is rare, and it’s illegal in several states. A dual agent can’t take sides or give advice.

6. What’s Your Typical Marketing Strategy?

This is a question sellers should ask. A Realtor should have a clear plan for listing and marketing your home in a way that produces the greatest odds of success in selling it quickly and at your desired price point.

7. How Long Does It Normally Take You to Close a Deal?

Closing on a home can take anywhere from a week, though that’s typically only common for cash buyers, to 60 days. The average time to close on a property in late 2020 was 47 days, according to Ellie Mae.

Asking a Realtor what their average closing time is can give you an idea of how efficiently and diligently they work to satisfy their clients.

If their average closing time is closer to four or six months, for example, that could be a red flag.

8. How Will We Communicate and How Often?

Being able to communicate with an agent is important to keep the process moving.

More than 90% of Realtors prefer email and text messaging as methods of communication.

That’s good if you prefer digital communication, but you may also ask whether phone calls or in-person meetings are an option.

9. Do You Work Alone or as Part of a Team?

Keep in mind that you may not be working with your Realtor alone to finalize the purchase or sale of a home. Agents may have a team of individuals they work with, including office managers, personal assistants, or marketing directors, who may reach out to you during the process.

Asking who else you may be connected with can help you avoid surprises if you decide to enter into a working relationship with a particular agent.

10. Will You Handle Staging and Prep Work?

If you’re selling a home, staging it could help influence buyers’ perceptions of the property and potentially encourage them to make an offer.

Staging is something you can do yourself, but your Realtor may have a staging company they work with to get the job done.

Asking about staging or small cosmetic updates, such as painting, can help you figure out what you’ll be responsible for to get your home ready for the market.

11. How Do You Handle Viewings?

The use of digital tools such as virtual tours have made properties more accessible to more buyers. Thirty-six percent of people say they’d consider buying a home entirely online, Zillow found, and 43% percent would be more likely to try to sell a home entirely online.

Buyers who prefer to see homes up close can ask Realtors how many viewings they typically schedule in a day or a week, per client. Sellers will want to get the details on how often open houses will be scheduled and how they’ll be marketed.

12. What Fees Do You Charge?

Real estate agents typically work on commission, meaning they only get paid when they close a deal. What you’ll pay and when depends on whether you’re buying or selling a home.

If you’re the buyer in a transaction, the seller is usually responsible for paying commission fees to both their agent and yours. If you’re selling a home, you’d cover the agent’s fees and they’d be deducted from the proceeds of the home sale.

The typical commission is 5% to 6% of the home’s sale price, split evenly between the buyer’s agent and the seller’s agent. So a $250,000 home, for example, would yield $12,500 to $15,000 in commissions.

Wrapping Up an Interview With a Realtor

As you finalize your meeting, here are a few additional questions for interviewing Realtors.

13. What Happens When I’m Ready to Make an Offer?

If you’re a buyer, agents should be able to walk you through how this process works, what to do if the seller makes a counteroffer, and what you’ll need to do next if your offer is accepted.

For example, they can advise you on how much earnest money you might need to pay and how to go about scheduling inspections.

14. Will You Help Me With Getting a Mortgage?

Agents may be able to offer recommendations for mortgage lenders. They may also be willing to communicate with your lender if there are questions about the property or the offer during underwriting.

You’re not obligated to use your Realtor’s recommended lender. In fact, it’s helpful to compare mortgage loan terms and interest rates from multiple lenders to find the option that best fits your needs.

15. What Are the Terms of Your Contract?

Working with a Realtor means entering into a contract, and it’s important to know what that contract says.

Once you sign a contract you’re typically locked in to working with them unless they agree to release you.

The listing agreement will last for a set period, such as three or six months. From your perspective, shorter may be better so that you’re not trapped if you don’t like the agent’s services.

The Takeaway

Due diligence in the search for the right real estate agent may mean interviewing a few, and not automatically going with your mom’s or co-worker’s agent friend. It’s important to know how to interview a Realtor and which questions to ask.

If you’re a buyer, once you’ve found an agent, you can turn your attention to getting prequalified for a mortgage loan, finding a property, and obtaining the mortgage.

SoFi home loans come with competitive, fixed interest rates and terms of 10 to 30 years.

And SoFi now offers loans on investment properties.

Get your rate in a couple of minutes.



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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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A Guide to Closet Remodels

Remodeling a closet can be a great way to get organized while getting rid of clutter. Fortunately, there are affordable systems—and no matter what closet remodel ideas you have, two broad options:

•   Remodels that use the current closet space
•   Remodels that would expand the space

If just thinking about your closet is triggering, if it’s a dark and chaotic wasteland, if it holds stuff from the Paleozoic Era, imagine the inviting space that could be your closet, with everything in order: casual and dress clothes, designer and sensible shoes, belts, bags, and sports equipment or jewelry.

Size Up What’s There

Step One is to have the right tools to accurately measure the size of the closet and, if desired, see what potential extra space exists.

Closets.com recommends the following tools:

•   Measuring tool: This can be a 25-foot flat tape measure or, if preferred and needed, an electronic measuring tool. The latter can measure longer walls.
•   Acrylic square finders (two): With these, verify whether closet corners are actually square.
•   Angle finders for closets with slanted ceilings: This allows the angle of the roofline to be properly measured.
•   Paper: Record all numbers; graph paper can be especially helpful when sketching out measurements and closet remodel ideas.

Here are measuring tips:

•   When doing a hard measurement, round down by the nearest quarter of an inch.
•   When doing soft measurements, round down to the nearest whole number.
•   Measure walls in three places and use the smallest of these measurements: near the top, in the middle, near the bottom.
•   Measure from top to bottom.
•   Check inside corners.
•   Check the angle of pitch for any sloped ceilings.
•   Note and measure any obstacles, which can include light fixtures and switches, trim, and vents.

An interior designer interviewed by GQ suggests that before buying anything for your closet remodel, it’s best to strip out what’s currently in there.

Next, before deciding what clothing rods, drawers, and cubbyholes might be needed, be crystal clear about what will be stored in the closet after the remodel. Some people may have lots of dress suits; others, a plethora of shoes. Still others may have a significant quantity of both.

How many T-shirts? Sweaters? Armed with this knowledge, it can be easier to come up with closet remodel ideas.

Consider Features You’d Like

Houzz.com lists popular features for closets today, and they include the following.

Get Lit

According to design professionals, today’s homeowners request plenty of lighted features, from LED lights that shine on specific areas of the closet to illuminated rods and shelves, and lights that focus on cabinets, both inside and out.

One expert notes that she has seen a 200% increase in demand for luxury lighting in closets over the past year. Although closet chandeliers were hot a little while ago, they seem to be moving over to make room for geometric lighting fixtures.

A Dressing Room

This space isn’t just for pampered celebrities anymore. Because not every house has bedrooms with enough square footage for dressing room space, some homeowners are choosing to transform an extra bedroom—or even an underused dining or living room—into a walk-in closet/dressing room.

These rooms typically have some kind of seating and mirrors, and even pieces of art, and range from reasonably simple rooms containing a makeup table and comfy seat to luxurious spaces.

Walls That Wow

People who may have a more straightforward paint color or wallpaper pattern in their rooms are sometimes willing to experiment more with the walls in their closets, experts say, perhaps using bolder hues or eye-catching patterns.

Ventilation systems to remove smells of clothing are being requested, and so are dehumidifiers.

Colorado Homes and Lifestyles lists some “over the top” features in demand today, including:

•   Entire walls for shoes for easy retrieval
•   Crown molding for a stylish upgrade
•   A sliding ladder, like what might be used in a home library
•   Chaise lounge for a true touch of glamour

HGTV offers some specialty recommendations:

•   Built-in drawers, called cellarets, to keep socks, ties, and more well organized
•   Laundry cabinet storage with a removable liner to carry the load to the washer
•   Jewelry organizer with multiple compartments, some with locks

Closet Remodel No-Nos

InnovateHome.org lists several things to avoid.

Dead Space

People often waste space above the top shelf in their closets. To some degree, folks can fold clothes and put them on that shelf or use it for storing boxes, but it becomes harder to access these items once they’re taller than a foot.

Wasted Space Behind Swing-in Doors

It’s best to avoid closet doors that swing in, if possible, because shelves can’t be built there and clothes hung there will continually be banged into. Even if this is the setup, though, the space can still be somewhat salvaged by the addition of a hook board where scarves, ties, and other thin objects can be placed.

Shallow Shelving

When shelves are too shallow, clothes hang over top of them and the closet can look sloppy, rather than organized. Lots of closet systems have 12-inch shelves; make sure this is deep enough for your needs or choose other shelving with more depth.

What Will a Closet Remodel Cost?

On average, a closet renovation in 2020 cost $3,000 to $5,000, according to Thumbtack.com.

A good rule of thumb is that the cost per linear foot is $125. Add-ons will affect the cost. Here are some amounts that someone might expect to spend:

•   Professional organization services: $40 to $60 an hour
•   New lights and outlets: $55 to $65 an hour
•   New door: $180
•   Paint job: $200

Expanding a master suite closet might cost $2,000, according to HomeAdvisor.com.

The materials used, organization elements included, permits, and whether a wardrobe is added affect the pricing.

Another factor is whether the closet is a reach-in or walk-in type. Reach-in closets are typically smaller, but when organized well can be functional. These closet remodels can cost between $1,000 and $2,500 and are often found in smaller bedrooms and hallways.

Or, if you’ve been watching TV remodel shows and are longing for the walk-in closets created there, this type may cost more, while offering plenty of room for clothing and accessories and a good view of what’s located where.

Renovations in general can add to the value of a home. For example, the addition of a master bedroom (which would naturally contain a closet or two) can have 58.5% of its costs recouped for a mid-range addition (average total cost of $136,739) or a 51.6% of costs recouped on an upscale addition (average total cost of $282,062).

If you’re looking to sell a home, a custom closet design may be of more value to a buyer than an off-the-shelf closet organizing product.

The Takeaway

A closet remodel can range from practical to astounding, suitable to luxe. Take measure of exactly what you want—first deciding whether to expand the space or enhance what you have—and then carve out a budget for that vision.

It could make sense to finance the home improvement project. With an unsecured personal loan from SoFi, you can count on no fees. And you can lock in a fixed rate, unlike a home equity line of credit.

Ready for a closet redo? Explore the advantages of a SoFi personal loan.



SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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7 Tips for Maintaining the Value of Your Home

Before signing the dotted line for a new home, your real estate agent might point out features about the property that could be “good for resale value.” And while you may be in the market for your forever home, the unexpected twists and turns of life mean that people sell their homes for a million reasons.

For homebuyers who are in the market for a smart investment, selling their home when the time is right is the objective from Day One. They may anticipate the future of an up-and-coming neighborhood, get a killer deal on a short sale or foreclosure, or intend to upgrade once they grow their families.

For others, a move can be unexpected. Issues like financial changes (for better or worse), job transfers, unexpected bills, marriage or divorce, or the need for more or less space can all motivate homeowners to sell.

And for a few, they just realize that the house they bought isn’t right for them.

In fact, Americans move every five to seven years on average. (Apparently, we’re a restless lot.)

No matter what your future plans are for your home, doing what you can to maintain its value can be a smart strategy. And while some value-add items take care of themselves, like the property’s location and the current real estate market, the majority are up to the homeowners.

And let’s be real. When it comes to working on a home, a little work here and there is a lot less painful than a lot of work on a moment’s notice.

Here are some ideas for creating a home maintenance checklist:

Update, Update, Update.

If a home that’s for sale has an updated anything, the real estate listing will scream it out in ALL CAPS. This can apply to appliances, cabinetry and countertops, flooring, popcorn ceiling, bathroom remodels, kitchen remodels, and more.

But which updates will actually add value to the house is a different question, and the answer can vary depending on current trends. In 2020, for example, home buyers are looking for large, spacious kitchens and, thanks to COVID-19, a home office space.

If your kitchen is due for an update, try to keep in mind that this doesn’t necessarily mean stripping it to the studs and starting from scratch. Are the cabinets in good shape? Consider a fresh coat of paint or stain to reflect the latest color trends.

In addition, something as simple as upgrading to matching appliances or installing a garbage disposal or water filtration system could help maintain value—even if they’re not top-of-the-line.

It can also be important to remember that “update” means bringing the home’s aesthetics into line with current styles—replacing brass fixtures for brushed bronze, for example, or swapping out carpet for wood—but it doesn’t necessarily mean having to buy the most expensive version.

Something as simple as adding some USB outlets to a room could turn it into a potential home office space.

Other, more intensive, updates might adjust the actual layout of the home. If your current house only has one bathroom, is it possible to find a space for another half bath? Are there unused rooms or wasted space that could be updated to become more functional?

If you’re unsure about whether an update is a smart idea, SoFi’s value estimator could help inform your decision.

Keeping an Eye on the Big Ticket Items

Repainting to cover wall damage or update to a more modern color is a project that may not take too much time or money out of your budget.

Repairing or replacing a home’s expensive items, like the foundation, roof, electrical, plumbing, water, septic, well, A/C—can come with some serious sticker shock.

Issues with a home’s foundation, for example, can cost upwards of $10,000 to remedy. But a foundation inspection? That’s more like $350 to $1,000 . And keeping an eye on the foundation and walls yourself is free. Note that estimates will vary based on factors like location, the size of the house, and the extent of repairs required.

Aside from the foundation, replacing a home’s central heating and air system can be a significant expense that can also cost five figures to replace in the event of a total failure. The biggest contributor? According to an article on Realtor.com, it’s neglect .

Regular maintenance can help extend the life of the system so it can reach it’s full life expectancy—which is generally about 15 years.

Staying On Top of Maintenance

According to HomeAdvisor’s State of Home Spending Report , the average homeowner spent $1,105 a year on maintenance in 2018. That sounds like a lot, but when compared to the average cost of $7,560 for home improvement projects in 2018, it starts to sound more affordable.

What’s more, the report found that homeowners completed an average of 6.7 home maintenance projects vs. just 2.2 home improvement projects.

For their study, they listed items like HVAC maintenance, cleaning gutters, and landscaping as maintenance-related projects, but the list can also include keeping up with the pool or hot tub, power washing siding, decking, or concrete areas.

If it seems like a lot to remember, consider setting reminders on your smartphone for things like replacing A/C filters, having carpets professionally cleaned, or flushing out the hot tub.

You may also consider adding a line item into your budget for maintenance items, since these are normal costs of owning a home and it can help to plan for them.

Improving Curb Appeal

If there’s a “For Sale” sign in front of your house, the outside will be the first thing a potential homebuyer judges about your property. If not, the way your home looks as visitors arrive still makes a statement.

To evaluate the outside of your home, look at it from a visitor’s perspective. Is the grass trim? Are the weeds under control? Consider taking a look at the driveway, mailbox, and front porch area and asking yourself, if you were thinking about purchasing this home, would you be interested based on the curb appeal?

If the answer is no, it doesn’t mean you have to dig into the dirt. An affordable landscaper can help if your home is lush with vegetation, invest in mulch to help keep weeds under control, and consider native plants and shrubbery that require the least maintenance.

Another item that deserves attention is your front door. It creates a statement about your home, serves as a welcome to visitors and, if it’s steel, comes with an amazing return on investment—as much as 91% of the costs, which average around $1,500.

Upgrading Energy Efficiency

Making your home more energy efficient is one of those goals that’s great not only if you’re selling (89% of homebuyers report wanting to see efficient windows and appliances in a home), but also if you want to reduce spending on bills and taxes . And it doesn’t just mean big investments like switching to solar or wind-powered energy, although those are both growing trends .

Making your home more energy efficient can also be as simple as replacing bad weather seals, ensuring that the attic has sufficient insulation, paying attention to the air and heating, and using energy-efficient light bulbs and appliances.

Upgrading the energy efficiency of your home is something that might even be rolled in with another project, such as maintenance or updating.

Installing Smart Tech

Even if your home is more than 100 years, old adding smart tech can make it 21st-century ready. Smart home assistants like Google or Alexa, for example, can control everything from the lights to the TV to locking the front door.

They can also allow you to remotely control your heating and air temperatures, make sure the oven is actually turned off, and even give you a sense of security with security systems or video door bells. In order for the home assistants to accomplish all of these features, additional smart appliances may be required.

While some types of home tech are hard-wired into the house and others are more portable, even being able to say “wired for surround sound” can be a bonus on a home listing.

According to a recent Forbes report, smart home tech is starting to move up the must-have list for homebuyers. But, like energy efficiencies, adding it to your home can be a perk even if you have no immediate plans to move.

Keeping the Bugs at Bay

One important job that comes with homeownership is keeping unwanted critters outside where they belong. Public enemy No. 1 in this category? Termites. They can wreak havoc on a home’s wood structures to the tune of $1 billion in property damage every year.

The problem is so widespread that some home loan companies require buyers to get a termite letter , which is basically a guarantee that the home is free from termite damage.

DIY recommendations for keeping the pests at bay can also check off items on the home maintenance list, including keeping gutters and downspouts flowing, filling in any places where water pools around the home or in the yard, filling in cracks in the foundation and keeping air vets free and clear.

And if an ounce of prevention is worth a pound of cure, then a $75 to $150 termite inspection is worth avoiding a $1,000 termite treatment.

Beyond termites and the havoc they wreak, there are a variety of other living creatures that can cause damage to a home or surrounding property, including attic squatters like mice or raccoons, carpenter bees, moles, mosquitoes, and even grasshoppers that brunch on beautiful landscaping.

Making Improvements Affordable

Budgeting a few extra dollars a month for A/C filters is one thing, but putting on a new roof is a bigger beast. Before going down the path of home improvement, it can be important to determine whether the goal is to add resale value, or something that’s just a personal desire. If it’s the former, consider using a Home Project Value Estimator that can help determine whether it’s a smart investment, or if it might be wiser to take a different route.

From there, one next step could be to weigh the various options for paying for a home project. Some companies offer same-as-cash financing options, or deferred-interest loans , but in those cases it’s important to remember that if the balance isn’t paid by the deadline, it could lead to a payment that includes any leftover balance plus interest.

One way to avoid deferred-interest surprises is with a personal loan. Securing a low interest rate and a fixed monthly payment can mean no surprises, less hassle, and maybe even enough to hire an expert for the heavy lifting.

Ready to bring back or improve the value of your home? With SoFi’s Home Improvement Loans, qualifying borrows can get approved for up to $100,000.

Apply for a SoFi home improvement loan today!



Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Homestead Exemption Bankruptcy Rules, by State

Despite what the name might suggest, homestead exemptions aren’t some kind of dusty old prospector or settler law. They are statutes that, in a bankruptcy filing, are designed to protect a primary residence from creditors.

If the Smiths file a Chapter 7 bankruptcy, how much equity they can protect with an exemption will be one of the factors determining whether they will be able to keep their home.

In a Chapter 13 bankruptcy, they won’t lose their home, but they will have to pay creditors an amount equal to the value of the property they can’t protect with an exemption, or their disposable income, whichever is more.

Before declaring bankruptcy, it’s best to consider the alternatives.

This guide will provide an overview of homestead exemptions as applied to bankruptcy, state by state.

What States Have a Homestead Exemption?

It’s easier to name the states that don’t have a homestead exemption since the vast majority of them do.

After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the only states without specific homestead exemptions are New Jersey, Pennsylvania, and Virginia. If you live in one of those states, then you know where you stand on potential shields with homestead exemptions.

If you live in any of the other 47 states, know that there are many more asterisks to hunt for depending on your situation and financial plans.

Even if you live in a state that offers homestead exemptions, this list of ways to help save money on your mortgage offers tips to weather financial storms, such as considering refinancing a home loan and requesting a new tax assessment.

If you are still renting and looking to buy a first home, give this list of pros and cons of buying a starter home a read as well. It digs into many of the big questions when making the huge decision of buying a home.

With a homestead exemption, a homeowner may be protected if a big setback strikes. But make sure to do your homework on the particulars of each state, and how home equity works.

Which State Has the Best Homestead Exemption?

While there is no literal “best” state to homestead in, because there are so many individual factors to weigh in assessing what’s advantageous, it is true that some states are more favorable than others for seeking the exemption.

Before reading the following, an asterisk: Because homestead exemptions are protections for primary residences, you cannot claim an exemption on an investment or vacation home.

Some states allow bankruptcy filers to use federal bankruptcy exemptions instead of the state exemptions.

The federal homestead exemption allows you to protect up to $25,150 of the equity in your home, and in cases where you and your spouse file taxes separately, do not live together, maintain separate homesteads, or (according to at least one court) do not have a direct financial connection with each other, each spouse can claim a separate homestead, up to the amount allowed an individual.

Also, most states allow a “wildcard” exemption that can be of particular help if one or more of a debtor’s other exemptions falls short of protecting their equity. A wildcard exemption amount can be divided among multiple items.

Since there’s so much variability in local, regional, and state codes and how they define the homestead exemption, when available, a good resource to consult is Nolo. Since 1971, Nolo has been a source of information for people who want to educate themselves better on legal matters but also are likely on the path to seeking professional help.

Except where stated otherwise, Nolo was the source for reporting on these state exemptions. (You can read Nolo’s list of most common bankruptcy exemptions here .)

Here’s a rundown of states that offer some of the strongest protections for the homestead exemption. “Strongest” here is being interpreted as either affordances for high exemptions or greater flexibilities in the law—but other factors, such as cost of living, should also be a consideration:

1. Florida. Under the Florida exemption system “homeowners may exempt an unlimited amount of value in their home or other property covered by the homestead exemption. However, the property cannot be larger than half an acre in a municipality or 160 acres elsewhere.” The exemption can also be claimed by the spouse or children of a deceased owner.

2. Georgia. Homeowners may exempt up to $21,500 of their home or other property covered by the exemption. They can also apply $5,000 of any unused portion of the exemption to another property they own—a “wildcard” exemption.

3. Iowa. An unlimited value in one home or a one-unit apartment can be sought in protection. The property must be in a city or town and is limited to one-half acre or 40 acres elsewhere.

4. Kansas. An unlimited amount of value can be sought in protection, but homeowners are limited in the amount of land they can protect. Homeowners can protect up to 1 acre of property if they live within city limits or up to 160 acres of farmland.

5. Minnesota. You can protect up to $450,000 of equity in your home and land or up to $1,125,000 of equity if your land (up to 160 acres) is used for agricultural purposes.

6. New Hampshire. You can protect up to $120,000 in equity.

7. Oklahoma. The limits on the homestead exemption apply only to acreage. You can exempt up to 1 acre if you live in a city, town, or village or up to 160 acres if you live elsewhere. (If you use more than 25% of the total square footage of your property for business, your exemption is limited to $5,000.)

8. Rhode Island. The exemption applies for up to $500,000 of equity.

9. South Dakota. If your home is less than 1 acre in a town or 160 acres in any other type of area, all of your equity is exempt.

10. Tennessee. Homeowners can exempt up to $5,000 of equity—and that amount goes up to $7,500 for joint owners and $25,000 if there’s at least one minor child who is a dependent. People 62 and older can exempt up to $12,500 of equity in their home—$20,000 if married, and $25,000 if the spouse is also 62 or older.

11. Texas. For residences on 10 acres or less in a city, town, or village or 100 acres or less in the country, Texas offers an unlimited homestead exemption.

Here’s all the rest:

1. Alabama. The Alabama Department of Revenue indicates that at the state level, homestead exemptions have a maximum value for people under the age of 65 of $4,000. It only applies on land area that is not more than 160 acres, and there is no limit on the homeowner’s income for the exemption to be applied. This link also includes breakdowns of nuances at the county level along demographic and land-value thresholds.

2. Alaska. Homeowners may exempt up to $70,200 of their home or other property covered by the homestead exemption. There may be some qualifications if the property is not a traditional house or condominium.

3. Arizona. Homeowners can exempt up to $150,000.

4. Arkansas. There are two systems in Arkansas for homestead exemptions. You can either choose to seek protections on a property used as a residence up to $800 if single or $1,250 if married. Or you can seek an unlimited amount of equity in 80 rural acres or one-quarter urban acre. If the land isn’t worth $2,500, you can increase the acreage up to 160 rural acres and 1 urban acre, up to a total equity of $2,500 in value.

5. California. Similar to Arkansas, California has two systems for the homestead exemption. Under one system, a single homeowner who is not disabled can exempt up to $75,000 of the property. If they live with a family member, the amount rises to $100,000—or $175,000 if they are 65 or older or disabled. Another system applies a wildcard exemption to the property of the debtor or the dependent of the debtor—and protects up to $26,800.

6. Colorado. Up to $75,000 of equity in a home or other property, such as a mobile home, is protected. The amount increases to $105,000 if the homeowner, spouse, or dependent is disabled or 60 or older.

7. Connecticut. Protects up to $75,000 of equity in real property, a co-op, or a manufactured home occupied at the time of filing bankruptcy.

8. Delaware. Exempts up to $125,000 in real property or a manufactured home that was used as a principal residence. Also, any interest that the debtor has in real estate held as a tenancy by the entirety is exempt.

9. Hawaii. If you’re the head of a household or over 65, you can exempt up to $30,000 of equity in no more than 1 acre of property. If you’re not the head of the family, you may protect up to $20,000 of equity in your home. There’s also a rule providing for the sale proceeds of homes to be exempt for six months after the sale.

10. Idaho. A filer can protect up to $175,000 in equity in a home or mobile home.

11. Illinois. Protects up to $15,000 in equity in your home, which includes a farm, mobile home, lot with buildings, condominium, or cooperative. The exemption includes proceeds from the sale of a homestead for one year.

12. Indiana. A debtor can exempt up to $19,300 in real estate or personal property used as a residence. In addition, any interest the debtor has in real estate held as a tenancy by the entirety is exempt unless both owners file for bankruptcy.

13. Kentucky. Up to $5,000 of equity can be claimed.

14. Louisiana. Homeowners are allowed to exempt up to $35,000 of home equity, and more “if your debts were incurred due to catastrophic or terminal illness or injury.”

15. Maine. Including co-ops, up to $47,500 of equity in property used as a residence can be claimed. Burial plots are subject to the same exemption amount. The amount can be increased to $95,000 in equity if you have a minor resident residing with you, or if you or your dependent is 60 or older or disabled and unable to maintain employment.

16. Maryland. Exempts residential property value up to $25,150 (husband and wife may not double). Property held as tenancy by the entirety is exempt against debts owed by only one spouse. Wildcard exemption: $6,000 of cash or any property.

17. Massachusetts. The state automatically protects up to $125,000 in home equity, and up to $500,000 for those who file and receive the homestead exemption. There are special rules if the filer is over 62 or disabled.

18. Michigan. Each homeowner and their dependents can exempt up to $40,475 in a property covered by the homestead exemption. If the homeowner is 65 or older or disabled, the exemption amount increases to $60,725.

19. Mississippi. An exemption of up to $75,000 of equity in the real estate you live in can be claimed, as long as the property is less than 160 acres. If you’re over the age of 60 and married or widowed, you can also claim the exemption for a former residence.

20. Missouri. You can exempt up to $15,000 of equity in the real estate in which you live or will live, or up to $5,000 of equity in a mobile home in which you live.

21. Montana. Up to $250,000 in equity can be protected as applied to up to 320 farm acres, a quarter of a city acre, or 1 residential acre outside a municipality.

22. Nebraska. Up to $60,000 can be protected on a home, provided it does not exceed two lots in a city or village or up to 160 acres outside a city or village.

23. Nevada. Up to $605,000 in equity on a home or mobile home can be claimed.

24. New Mexico. Up to $60,000 of equity in your home can be protected.

25. New York. The homestead exemption amount varies greatly depending on the county. If the property is in the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, or Putnam, the exemption is $170,825. If the property is in the counties of Dutchess, Albany, Columbia, Orange, Saratoga, or Ulster, the exemption amount is $142,350. For any other county in the state, the exemption amount is $85,400.

26. North Carolina. Homeowners may exempt up to $35,000 of their home or other personal property. Homeowners who are 65 or older whose spouse is deceased may exempt up to $60,000, but only “if the property was previously owned by the debtor as a tenant by the entirety or as a joint tenant with rights of survivorship.”

27. North Dakota. Exempts up to $100,000 of equity in your home, “house trailer,” or mobile home.

28. Ohio. Protects up to $145,425 of equity in one parcel of real or personal property (home, manufactured, or mobile home) that you or your dependent uses as a residence.

29. Oregon. A property owner may exempt up to $40,000. Married couples may exempt up to $50,000.

30. South Carolina. Protects up to $60,975 in equity in a home or real estate used as a residence.

31. Utah. Homeowners may exempt up to $30,000. Bankruptcy filers can also use the exemption to protect more than one parcel of land, but may protect up to 1 acre only.

32. Vermont. An exemption up to $125,000 of the equity in a home, condo, or mobile home can be claimed.

33. Washington. Up to $125,000 of equity in a debtor’s home or principal residence, including a manufactured or mobile home, can be protected under the homestead exemption.

34. West Virginia. Homeowners may exempt up to $25,000 of their home or other property.

35. Wisconsin. Up to $75,000 of equity in a home can be exempted.

36. Wyoming. Up to $20,000 of equity in a home can be shielded.

Still with us? If you don’t see a state listed above, that means it doesn’t offer any homestead exemptions for use in a bankruptcy filing.

The Takeaway

Homestead exemption rules in a bankruptcy filing differ greatly by state. If you can’t keep your head above financial water, will you lose your home? It depends on several factors.

Someone in your local government can refer you to up-to-date information beyond what you might find online. And of course a consumer law attorney has answers.

Refinancing a mortgage may provide some relief to a struggling homeowner. SoFi offers a refi, cash-out refi, and student loan cash-out refi.

Mortgage loan officers can guide you through the process, and member specialists are standing by to answer any other questions.

SoFi also offers an array of mortgage loans, with no hidden fees.

Find out more about SoFi home loans.



SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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How to Buy a House From a Family Member

Sometimes home, sweet home is right under our noses. Buying a house from a family member may be the perfect solution, but everyone should be aware of how to negotiate and seal the deal.

A house hunter may have their heart set on buying a house from their parents because of the memories it holds. Another might see the appeal in buying Grandma and Grandpa’s home so they can retire in Florida. Others may have a relative who wants to give them a good deal.

Whatever the circumstances, the transaction is a bit different than one between strangers, so let’s break down some important things to know about how to buy a house from a family member.

Proceed With Caution

Before diving into the details of buying a house from a family member, it’s important to consider how crafting the deal can affect familial relationships.

Most likely neither party will hire a real estate agent, which might lead to keeping negotiations and planning all in the … family. So it’s a good idea to have regular check-ins to ensure that both parties feel good about the next steps and are ready to move forward.

It can be helpful to take notes about the arrangement after meeting and making a copy for everyone involved so that all important details are in writing and available for review. That way everyone is clear on what is expected of them.

No one wants to argue with family members over money or property, so listening well, compromising, and double-checking that everyone is fully on board are good ways to have a harmonious handoff.

Determine the Purchase Price

When it comes time to finalize a price for a home someone is purchasing from a family member, this step can be a bit trickier than when buying a home from a stranger.

It’s important to make sure that no one feels taken advantage of.

To determine the purchase price, it’s a good idea to first decide on the fair market value—what the property would sell for on the open market. This can be done by reviewing the local real estate market or hiring an appraiser.

You can look at comparable sales, or comps, with public property records, on Zillow by using the “Recently Sold” filter, on Realtor.com under “Just Sold,” and on Trulia under “Sold.”

Once both parties have an idea of the home value, they can decide how much the buyer will pay. In some cases, this will be the fair market value. In other scenarios, a family member may offer to sell the house at a lower cost, pay closing costs, or offer a cash gift.

Draw Up the Purchase Agreement

Now that both parties have settled the details of the real estate arrangement and are ready to move forward, it’s time to draw up a purchase agreement. The agreement will outline price and payment terms.

Buyers who need a home loan can take the contract to their lender when applying for a mortgage.

Prepare to Jump Through Hoops

There are two main types of real estate transactions: arm’s length and non-arm’s length.

An arm’s length transaction is more common: The parties involved in a sale and purchase do not have a relationship and are acting in their own self-interest.

When someone buys a home from a family member, it’s a non-arm’s length transaction. This can apply to friends and co-workers as well.

Non-arm’s length transactions may be subject to more scrutiny because the chance of fraud increases when both sides have a relationship, and because one party could manipulate the other in some way.

The arm’s length principle of transfer pricing comes into play. That means the sale price of the home must equate to what it would be between strangers.

In short, there are more government and lender guidelines to follow when trying to get a mortgage.

Know How the Gift of Equity Works

One thing the seller may want to consider is giving their relative a gift of equity, or selling for less than full market value.

A gift of equity can result when one party (say a parent) wants to give the buyer (like a child) a substantial discount.

A gift of equity comes with tax implications worth considering. There is no immediate tax impact, but the basis of the property can affect future transactions. To determine the basis, choose the greater of the following two:

1. How much the buyer paid for the property.
2. What the seller’s adjusted basis of the property was at the time of sale.

Depending on the amount of the basis of the property, a gift tax may apply.

Gifts of equity aren’t taxable for the recipient. Sellers are allowed to give $15,000 per person each year without having to file a gift return.

Here’s another plus for buyers: Many lenders allow the gift to count as a down payment.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.


Bring in the Professionals

Even though buying a house from family is a personal affair, it can be helpful to bring in some professionals to make sure the process goes smoothly, everything is done legally, and both parties walk away feeling satisfied and respected.

It can be a good idea to hire a title company that can protect the buyer from any liens or to ensure that no one else has a claim on the home. Even with a high level of trust between family members, this can be a savvy step to take to protect the buyer.

A lawyer can help make sure all contracts are done properly.

And it can be helpful to consult a tax professional in order to be aware of any tax implications of the agreement.

Know How to Finance Home, Sweet Home

When buying a home from a family member, many buyers will still need to take out a home loan. Even with a discount or a special offer from a family member, it can be hard to purchase a home outright.

Those who need a home loan can consider taking the following steps to make sure they find the right loan for them.

Step 1. Understand What a Mortgage Is

A mortgage is a loan that can be obtained from a mortgage company, a commercial bank, or another financial institution. This type of loan allows consumers to purchase a home or other types of real estate.

Typically, lenders only provide mortgages to borrowers who meet select standards such as having a certain income and credit score. Basically, they want to ensure that the borrower can pay back the loan.

The home the loan is for acts as collateral, and if the borrower does not repay the money borrowed (including interest), the lender may foreclose on the property.

Step 2. Prepare for the Mortgage Process

Before applying for a mortgage, getting organized is an important part of the process. Prospective borrowers should know their credit score and how much they can afford to pay each month for mortgage payments.

Step 3. Research Loan Options

When applying for a home loan it can be beneficial to speak with multiple lenders to see what rates and terms may be available. Weighing interest rates (fixed vs. adjustable and rate), types of loan programs (conventional, FHA, or VA), and length of the loan (generally 15 or 30 years) can help the borrower make a more informed decision.

Prequalifying for a loan gives you an estimate of what you might be able to borrow, based on information you provide about your finances and a “soft” credit inquiry.

Pre-approval is based on a deeper look at your creditworthiness. If you’re pre-approved, you’ll receive a pre-approval letter, which is an offer (but not a commitment) to lend you a specific amount.

Online lenders are also an option for taking out a mortgage. SoFi mortgage loans come with no hidden fees or prepayment penalties, and borrowers can put as little as 10% down.

The Takeaway

How to buy a house from a family member? Look at comps, realize the beauty of the gift of equity, know that the transaction may face extra scrutiny, and consider calling in some professionals.

Find your rate on a SoFi home loan in just two minutes.



SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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