Home Ownership Offers Plenty of Tax Benefits
While renting offers zero tax breaks, buying a home offers several tax benefits that can make homeownership more affordable. Real estate professionals need to be careful in providing detailed tax advice to clients to avoid lawsuits, but you can ensure clients have the information they need to understand the all of the tax benefits of home ownership.
The following is a few of the tax benefits to home ownership, according to Stephen Fishman, an author and lawyer who specializes in small business, tax and intellectual property law.
▪ Home mortgage interest deduction: Home owners can take an itemized deduction on interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home. This deduction could potentially reduce the cost of borrowing by one-third or more.
▪ Property tax deduction: Home owners can deduct from their federal income taxes the state and local property taxes that you pay on the home.
▪ Deductible home buying expenses: Several closing costs in a home purchase are also deductible, such as loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.
▪ $250,000/$500,000 home-sale exclusion: Home owners who have lived in their home for two of the prior five years prior to its sale do not have to pay income tax on the majority of their profit — $250,000 for single home owners and $500,000 for married homeowners who file jointly.
▪ 14 days of free rental income: Home owners can rent the home up to 14 days during the year and pay no tax at all on the rental income.
Source: “The Tax Benefits of Homeownership,” Inman News (Feb. 4, 2011) (log in required)
Tuesday, February 8, 2011
Tuesday, February 1, 2011
Sellers Grow Impatient Waiting for Buyers
Sellers Grow Impatient Waiting for Buyers
Living in a home on the market that must always be ready at a moments notice for a showing can be unnerving for home owners. And as homes linger on the market for months upon months, begging children to keep their rooms tidy, keeping pets hidden, and maintaining sparkling clean sinks and tubs can take its toll, according to a recent article in The Washington Post, which chronicled four families trying to sell a home and how they’ve coped with the wait for buyers.
Some of the buyers expressed frustration with real estate professionals for not better preparing them for the wait. Here are a few things these sellers mentioned they wanted from real estate professionals:
1. Be courteous during showings.
Liz Dordal of Haymarket, Va., says she wishes real estate professionals would always be sure to contact her in advance of showings. She has a security system that she needs to disarm and a cat to hide. Angie Howard of Fort Washington, Md., agrees. She says real estate professionals don’t always call before a showing, which doesn’t give her enough time to get the dog caged and the house ready.
Dordal also says visitors don’t always remove their shoes to protect her carpets and cherry wood floors when they visit.
2. Offer constructive advice about making the home more competitive.
Scott Laisney of Kensington, Md., is trying to sell a 1958 four-bedroom, split level and wishes his agent would have recommended to him on how to get his house in better showing shape. He now realizes that his house needs to be decluttered and repainted in a neutral color. "The kitchen counters were all scratched, and we asked if we should fix that . . . and the [agent] said no, that people will see that it can be done. We asked about painting, and she said no," Laisney said.
But after 60 days the couple had no showings and dropped the price by $10,000, which still made no difference.
"With no action at all, we realized, 'we're doing something wrong here,' " Laisney said.
They took the home off the market and consulted a stager and another agent.
3. Don’t treat all sellers like they're desperate.
Dordal says real estate professionals need to educate buyers more about how different seller situations can be. For the past five months, Dordal has been trying to sell a three-bedroom, luxury townhome, and she’s frustrated that real estate professionals treat all sellers like they are desperate to sell.
“People assume that you're in distress if you have a place for sale and that you'll take a lot less,” Dordal says. “I just look at them and say, 'No, I'm not.' "
Source: “Home Sellers Cope With Houses in Limbo,” The Washington Post (Jan. 21, 2011)
Living in a home on the market that must always be ready at a moments notice for a showing can be unnerving for home owners. And as homes linger on the market for months upon months, begging children to keep their rooms tidy, keeping pets hidden, and maintaining sparkling clean sinks and tubs can take its toll, according to a recent article in The Washington Post, which chronicled four families trying to sell a home and how they’ve coped with the wait for buyers.
Some of the buyers expressed frustration with real estate professionals for not better preparing them for the wait. Here are a few things these sellers mentioned they wanted from real estate professionals:
1. Be courteous during showings.
Liz Dordal of Haymarket, Va., says she wishes real estate professionals would always be sure to contact her in advance of showings. She has a security system that she needs to disarm and a cat to hide. Angie Howard of Fort Washington, Md., agrees. She says real estate professionals don’t always call before a showing, which doesn’t give her enough time to get the dog caged and the house ready.
Dordal also says visitors don’t always remove their shoes to protect her carpets and cherry wood floors when they visit.
2. Offer constructive advice about making the home more competitive.
Scott Laisney of Kensington, Md., is trying to sell a 1958 four-bedroom, split level and wishes his agent would have recommended to him on how to get his house in better showing shape. He now realizes that his house needs to be decluttered and repainted in a neutral color. "The kitchen counters were all scratched, and we asked if we should fix that . . . and the [agent] said no, that people will see that it can be done. We asked about painting, and she said no," Laisney said.
But after 60 days the couple had no showings and dropped the price by $10,000, which still made no difference.
"With no action at all, we realized, 'we're doing something wrong here,' " Laisney said.
They took the home off the market and consulted a stager and another agent.
3. Don’t treat all sellers like they're desperate.
Dordal says real estate professionals need to educate buyers more about how different seller situations can be. For the past five months, Dordal has been trying to sell a three-bedroom, luxury townhome, and she’s frustrated that real estate professionals treat all sellers like they are desperate to sell.
“People assume that you're in distress if you have a place for sale and that you'll take a lot less,” Dordal says. “I just look at them and say, 'No, I'm not.' "
Source: “Home Sellers Cope With Houses in Limbo,” The Washington Post (Jan. 21, 2011)
Wednesday, January 26, 2011
New Home Sales Surge
New Home Sales Surge
New single-family home sales in December rose to their highest level in eight months and prices were the highest since April 2008, raising cautious optimism for a housing market recovery.
The Commerce Department said sales jumped 17.5 percent to a seasonally adjusted 329,000 unit annual rate after a downwardly revised 280,000-unit pace in November. Economists polled by Reuters had forecast new home sales rising to a 300,000-unit pace in December from a previously reported 290,000 unit rate. Compared to December a year earlier, sales were down 7.6 percent. Overall 2010 sales dropped 14.4 percent to a 321,000-unit rate.
Economists saw the gains as significant.
"Clearly we are seeing stabilization in new home sales and this data suggests some upward momentum that we have seen in existing home sales. What is important to realize is even in a period of softer new home sales, inventory continues to decline, said Dean Maki, chief U.S.. economist with Barclays Capital in New York.
“The level of inventory is at its lowest since the 1960s," Maki said. This suggests the big declines in housing starts are now behind us and housing starts should be on a gradual trend in 2011.”
Brian Bethune, an economist with HIS Global Insight in Lexington, Mass added: "It's meaningful to the extent that there is a pattern of numbers showing increases. It's a sign that there is a turnaround. Things are definitely perking up, but there is a question whether it's sustainable.
Read the latest report from the National Association of REALTORS®: December Existing-Home Sales Jump
Source: "New Home Sales Surge in December," Reuters(Jan. 26, 2011)
New single-family home sales in December rose to their highest level in eight months and prices were the highest since April 2008, raising cautious optimism for a housing market recovery.
The Commerce Department said sales jumped 17.5 percent to a seasonally adjusted 329,000 unit annual rate after a downwardly revised 280,000-unit pace in November. Economists polled by Reuters had forecast new home sales rising to a 300,000-unit pace in December from a previously reported 290,000 unit rate. Compared to December a year earlier, sales were down 7.6 percent. Overall 2010 sales dropped 14.4 percent to a 321,000-unit rate.
Economists saw the gains as significant.
"Clearly we are seeing stabilization in new home sales and this data suggests some upward momentum that we have seen in existing home sales. What is important to realize is even in a period of softer new home sales, inventory continues to decline, said Dean Maki, chief U.S.. economist with Barclays Capital in New York.
“The level of inventory is at its lowest since the 1960s," Maki said. This suggests the big declines in housing starts are now behind us and housing starts should be on a gradual trend in 2011.”
Brian Bethune, an economist with HIS Global Insight in Lexington, Mass added: "It's meaningful to the extent that there is a pattern of numbers showing increases. It's a sign that there is a turnaround. Things are definitely perking up, but there is a question whether it's sustainable.
Read the latest report from the National Association of REALTORS®: December Existing-Home Sales Jump
Source: "New Home Sales Surge in December," Reuters(Jan. 26, 2011)
Friday, January 21, 2011
3 Budget-Friendly Decorating Tips With Impact
3 Budget-Friendly Decorating Tips With Impact
You don’t have to spend a fortune to create a well designed, inviting home. Interior designer Lili Diallo, deputy style editor at Country Living magazine, often uses what home owners already own and just tweaks it to create an inviting space.
Here are a few of her budget-friendly tips for home decorating:
1. Move one piece of furniture.
Just moving one furniture item can drastically change the energy and look of a room. Instead of a sofa against the wall, pull the sofa into the room with a console and two lamps behind it.
2. Update the windows.
Window treatments can make a big statement in a room and simply changing them out can give a room an entirely new look. Try white muslin, or loose, white sheer linen panels so the light will come through them and soften the room, she suggests.
3. Add a large rug.
You don’t need two or three small area rugs in one room. Instead, swap them out for one large rug to unify and pull the room together and even enlarge it, she says.
Source: “Decorating Without Breaking the Budget,” The Washington Post (Jan. 20, 2011)
You don’t have to spend a fortune to create a well designed, inviting home. Interior designer Lili Diallo, deputy style editor at Country Living magazine, often uses what home owners already own and just tweaks it to create an inviting space.
Here are a few of her budget-friendly tips for home decorating:
1. Move one piece of furniture.
Just moving one furniture item can drastically change the energy and look of a room. Instead of a sofa against the wall, pull the sofa into the room with a console and two lamps behind it.
2. Update the windows.
Window treatments can make a big statement in a room and simply changing them out can give a room an entirely new look. Try white muslin, or loose, white sheer linen panels so the light will come through them and soften the room, she suggests.
3. Add a large rug.
You don’t need two or three small area rugs in one room. Instead, swap them out for one large rug to unify and pull the room together and even enlarge it, she says.
Source: “Decorating Without Breaking the Budget,” The Washington Post (Jan. 20, 2011)
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