House of the Week: Single-Family Castle


0 Highway 31N, Mooresburg, TN

For sale: $349,900

You know how it is with castles: they’re huge, and it can be so much work keeping up the moat.

Here’s a castle without the hassle: a reasonably sized 2-bedroom, 1.5-bath, 3,526-square-foot castle built for family life. The ivy-covered castle is built into an East Tennessee moutainside, with brick walls and floors, and 20-foot ceilings.  And it’s on 70 acres — plenty of room for hunting dragons.

According to the brokerage selling the home, United Country Clinch Mountain Real Estate, the couple who bought the property in the 1980s intended at first to build a replica of Tara from “Gone with the Wind.”

“Somewhere along the line, she changed her mind and decided she wanted a castle,” said Amy Shrader, an associate of agent Joseph Haun.

The owners have passed away, so their son is selling the castle. The brick floor moves a bit when you walk on it, and the half-bathroom on the main floor contains a secret room. You have to push on the wall to open it.

And they did keep a piece of Tara. The staircase was brought in from the Loew’s Grand Theatre in Atlanta, where “Gone with the Wind” premiered.

When the castle was completed, news coverage attracted throngs of tourists who wanted to see the castle on the hill. The owners let them in and gave them a tour, then asked each of them to sign the bricks in the kitchen with markers. The names are still there, though the buzz has died down.

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About the Author

Emily Heffter writes about real estate trends and data for Zillow Blog.


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Rules for Using Gift Funds for a Down Payment


With the holiday season of giving just around the corner, it’s a good time to revisit down payment gifts for home buyers. Getting money for a down payment on a home purchase could be the best gift ever, but there are lender and IRS rules for gifts that you must know to make sure everything goes smoothly. Here’s a rundown.

Gifts must be from family members

As an overarching rule, mortgage lenders require gifts for down payments to be from family members. Lenders might make case-by-case exceptions, and if so, will require that the relationship of the non-relative and the other factors of the loan profile be strongly compelling. For example, if you were receiving down payment gift funds from your godparents and could document that they’ve been close to you and your family all your life, that might be a case certain lenders would accept.

The likelihood of a non-relative being accepted as a gift donor is greater if a lender intends to keep that loan on its balance sheet rather than sell to Fannie Mae, Freddie Mac or some other future investor after the loan closes. Even then, most lenders would still want to see strong income history and career trajectory as well as top-tier credit scores for you as a borrower (these stronger factors of an overall profile that offset a factor where an exception is being made are known as “compensating factors”).

Gift tax is imposed on the donor, not the receiver

When starting the gift conversation with family members, make sure they know that gift tax implications are imposed on the donor. Conversely, you don’t have tax implications for receiving the gift. Two main provisions of gift tax law impact donors, and if handled properly, can enable the donor to have no tax liability, even for large gifts.

Annual gift tax exclusion limit

First, under 2014 annual gift tax exclusion law, any individual can gift any other individual $14,000 per year tax free. So a married set of parents can each give $14,000 to their single child for a total of $28,000. Or that same set of parents could gift to a married couple a total of $56,000.

This doesn’t need to be filed on annual tax returns, but you need to make sure it’s easy to document gift tax compliance later if needed. The clearest way to handle the $56,000 example is to have the mom write two $14,000 checks: one to her son and one to her daughter-in-law. Then the dad would do the exact same thing, for a total of four checks of $14,000 each. Then if the parents were ever asked by the IRS to demonstrate they were within the 2014 annual exclusion limit, it would be easy.

Lifetime gift tax exclusion limit

Second, under 2014 lifetime gift tax exclusion law, any individual can gift up to $5.34 million tax free over a lifetime. So let’s say in the example above that the married set of parents were trying to gift their married son a total of $100,000. We know that they can gift $56,000 tax free under the annual exclusion rule. The remaining $44,000 can be gifted tax free under the lifetime exclusion rule. That amount can all be transferred in a lump sum, and the donors must complete IRS Form 709 to keep a tally of gift funds that fall under the lifetime exclusion.

Both the annual and lifetime exclusions change each year. The annual gift tax exclusion limit for 2015 will remain at $14,000. The lifetime gift tax exclusion limit for 2015 is projected to increase slightly to $5.43 million.

Also for home buyers looking to buy in early 2015 with gift funds, keep in mind that as we close out 2014 and enter 2015, donors can give you funds under the 2014 annual exclusion on or before Dec. 31, then double it under the 2015 annual exclusion on Jan. 1 or later.

Gift donors must provide letter bank statement to lenders

It’s not enough to tell your lender you’ll be getting gift funds from a family member. Lenders must track gift funds as painstakingly as they track all your other asset and income documentation.

The funds can’t just appear from your family donor, so add this topic to the list of things to talk about upfront. Here are the most important things to know:

  • You and the donor must both sign a lender Gift Letter verifying the funds are in fact a gift.
  • The letter will explicitly ask the donor to verify that the gift isn’t a loan.
  • Neither you nor the donor writes the letter. The letter will be provided by your lender, and it’s the only format that the lender will accept.
  • For most loans, donors must also provide proof of their ability to gift, usually in the form of a bank statement. There are very few exceptions, and your lender can advise on whether it will waive the requirement.

As long as donors know these lender and tax rules upfront, the process is simple. So as we enter the season of gift giving, you can use these guidelines to have planning discussions with your family.

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Report: Jennifer Lawrence Buys Jessica Simpson’s Former Home


Source: IMDb

Source: IMDb

Academy Award winner Jennifer Lawrence just scooped up Jessica Simpson’s former Beverly Hills home, according to E! News.

Simpson moved in on the heels of her divorce from singer Nick Lachey and sold the home last year to make way for baby No. 2 with husband Eric Johnson. Lawrence, meanwhile, bought it from the current owner just as she’s reportedly getting into a relationship with Coldplay frontman Chris Martin.

Whether a breakup pad or a new love nest, it’s easy to see why the 5,500-square-foot abode attracts Hollywood’s leading ladies. Kerry Joyce, who’s been named the best interior designer by Forbes magazine, designed the house to be evocative of The Hamptons with light and airy furnishings, tasteful decor and park-like grounds. The property also has a walled and gated courtyard with a koi pond and a swimming pool. It was most recently listed at $7.895 million.

Lawrence, who won the Oscar for best actress for her role in “Silver Linings Playbook,” returns to the big screen this fall in “The Hunger Games: Mockingjay Part 1.”

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About the Author

Catherine Sherman, a real estate writer for Zillow Blog, covers real estate news, industry trends and home design.


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Home Value Growth Slows, Glides Back to Normal


The markets that led the country through the real estate recovery with rapid home value appreciation are cooling off, new Zillow data shows.

Zillow’s Real Estate Market Reports for the third quarter reveal a softening real estate landscape. Buyers in San Francisco, Los Angeles, Washington, D.C., Seattle and other hot markets have a better chance to buy a home now than they did a year ago. More inventory is on the market, more sellers are cutting their list prices and home values, while still on the rise, are rising more slowly.

Nationally, 18.6 percent more homes were on the market than a year ago. Annual home value appreciation peaked in April at 8 percent and has been gradually falling ever since. Between September 2013 and September 2014, national home values rose 6.5 percent to a median of $176,500.

The gradual slowdown is a sign that the market is returning to normal, said Zillow Chief Economist Stan Humphries, and it offers further evidence that there is no housing bubble.

“We always knew these market conditions couldn’t last, and it’s good to see us now on a more natural and sustained glide path down toward more normal market conditions,” Humphries said.

To dive into our recently released Q3 Real Estate Market Reports, visit Zillow Research.

Blog_2014_Q3_Zillow_b_02

About the Author

Emily Heffter writes about real estate trends and data for Zillow Blog.


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8 Real-Life Haunted Houses for Sale


Is that the “Crying Lady Ghost” or the sound of old pipes? Now you can see for yourself. Some of America’s oldest and most haunted homes are on the market.

Take a stroll down eerie lane, but know this: You’re on your own from here. There’s no telling what’s lurking behind these doors.

Schweppe Estate

405 N Mayflower Rd, Lake Forest, IL
For sale: $9.95 million

Lake Forest, IL 1

A wedding gift for Charles and Laura Schweppe, this grand 1917 estate has played host to more than one tragedy over the years. Laura died from a heart attack at age 58, and Charles committed suicide in the master bedroom a few years later. Following their untimely deaths, the mansion reportedly remained vacant for 46 years, with rumors circulating that the couple’s ghosts haunt the bedroom and roam the halls.

Ann Starrett Mansion

744 Clay St, Port Townsend, WA
For sale: $750,000

Port Townsend, WA

In 1889, George Starrett built this Queen Anne-style mansion for his queen, Ann. In recent years, the house — with an eight-sided dome tower, solar calendar and other opulent details — has served as a boutique bed-and-breakfast. But a female manifestation with red hair and a male spirit — believed to be Ann and George — have been spotted on the premises.

Hampton Lillibridge House

507 E Saint Julian St, Savannah, GA
For sale: $2.4 million

Savannah, GA

When Jim Williams, a local restoration expert, transplanted this home to its current location on St. Julian Street, workers reported odd noises and a tall man dressed in black glaring through a bedroom window. Since, stories of ghostly visions and more have surrounded the late 18th-century house. Some even claim it’s Savannah’s most haunted home.

Allyn Mansion

511 E Walworth Ave, Delavan, WI
For sale: $1.2 million

Source: Cliff via Flickr Creative Commons

Source: Cliff via Flickr Creative Commons

In 1885, this restored mansion was built for the Allyns, a wealthy farming family. Then on a cold February day in 1913, Mr. Allyn died while reading his afternoon mail in the parlor. Following his death, the property changed hands a few times before becoming a nursing home, furniture store and most recently a bed-and-breakfast. But in 2007, the BB closed its doors, and the home has been on and off the market since. Some claim it is haunted.

McRaven Tour Home

1445 Harrison St, Vicksburg, MS
For sale: $575,000

Vicksburg, MS

 

Called “the time capsule of the South,” this Civil War-era home is considered the most haunted in Mississippi. At least five inhabitants died in or near the home, according to mcraventourhome.com. John H. Bobb, who is credited with building the last section of the house, is said to have died violently at the hands of Federal soldiers outside McRaven. One of the former owners, who died during childbirth in 1836, is also believed to grace the home with her spirit.

The Dakota

1 West 72nd St, New York, NY
For sale: #34 for $6.8 million #46 for $14.5 million

New York, NY

In 1980, all eyes were on the Dakota, the Manhattan co-op where John Lennon was murdered. But some say this historic building has had a long history of paranormal activity, and that Lennon himself witnessed the Crying Lady Ghost walking through the halls. Since the music legend’s death, others have reported seeing the ghosts of children wearing turn-of-the-century garb.

Perkins House

515 S Samuel St, Charles Town, WV
For sale: $749,000

St. Charles Town, WV 1

The Perkins House was built by the leader of the Virginia militia that helped capture abolitionist John Brown leading up to the Civil War. In 1859, Brown was convicted at a local courthouse and executed by hanging, despite fierce objections. The home was constructed on the execution site in 1891, with a “John Brown Scaffold” sign serving as a reminder of the property’s gruesome history.

Pottstown Victorian

166 N Hanover St, Pottstown, PA
For sale: $176,500

Pottstown, PA

 

Ghost hunters may want to add this house their list of potentially haunted homes. The listing description hints at the possibility of the 1870 Victorian being haunted, but it might also just be old. The real estate agent invites you to “come see for yourself.”

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About the Author

Catherine Sherman, a real estate writer for Zillow Blog, covers real estate news, industry trends and home design.


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