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Tax Tips - What You Need to Know if You Bought or Sold a Home Last Year

March 8, 2012 3:52 pm

With tax season in full swing and the dreaded April deadline right around the corner, there are a number of important things that those who were on either side of a home transaction last year should keep in mind when it comes to filing this year’s taxes.

A look at the Internal Revenue Service’s tax tips page shows that if you have a gain from the sale of your main home, you may qualify to exclude all or part of that gain from your income.

The IRS explains that if you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

Real estate broker’s commissions, title insurance, legal fees, advertising costs, administrative costs, and inspection fees are all considered selling costs and may be used to reduce one’s taxable capital gain by the amount of the selling costs, which could result in a big savings depending on the final sale price.

When it comes to interest paid on a mortgage, much of that is tax deductible. A married couple filing jointly can deduct all of their interest on a maximum of $1 million in mortgage debt secured by a first or second home.

Buyers may also be able to deduct some of the interest they paid on a home equity loan or similar line of credit.

One deduction that most buyers tend to forget about deals with points or origination fees on a home loan, which are paid during the purchase of a home and are generally tax deductible in full for the year that they were paid.

Refinanced mortgage points are also deductible, but only over the life of the loan, not all at once. Homeowners who refinance can immediately write off the balance of the old points and begin to amortize the new.

If your lender required private mortgage insurance, the PMI premiums are tax-deductible for mortgages taken out between 2008 and 2011.

Making home improvements to the home prior to the sale or once one moves in might qualify for an interest deduction on your home improvement loan. Qualifying capital improvements are those that increase your home’s value, prolong its life, or adapt it to new uses, such as adding a porch or installing energy-efficient windows.

Many times during a sale, the seller will send the local tax collector’s office a check for real estate taxes prior to the closing. In many circumstances, however, the buyer will pay a pro-rated portion of the taxes for the year at closing. This tax deduction is one that is also quite often forgotten.

For those working from their new home, if a room is used exclusively for business purposes, you may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, and depreciation.

In some instances, if you have moved because of a new job, moving costs may be deducted. These can include travel or transportation costs, expenses for lodging, and fees for storing your household goods.

For those that took advantage of the first-time homebuyer credit, if within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit.

Every year the tax laws change and certain tax deductions become available while others phase out. If you have recently bought or sold a home, it’s probably a good idea to seek out a professional tax consultant to do your taxes, as missing deductions that you can legally claim can add up to quite a bit of money.

For more information about tax deductions, contact our office today.

Published with permission from RISMedia.


Downsizing Trend Gains Steam as Homeowners Opt for Less Space

March 8, 2012 3:52 pm

As we continue to move away from the era of the McMansion, downsizing has become a popular trend in real estate markets across the country. The trend has gained a lot of momentum within the past few years as well, as homeowners are being forced to downsize due to the financial problems that have wreaked havoc on our nation and the housing industry as a whole.

No matter what the reason is behind your need to downsize, if you’re ready to trade in some space, a good way to start the process is by creating a list of expenses and figuring out what you truly can and can’t afford. This will enable you to pick a home that will fit your needs now and well into the future. The last thing you want to do is put yourself in a situation where you may end up in financial trouble a few years down the road.

While trading in a large home for less space may seem like the only option, it’s important to note that there may be other solutions that can keep you in your current home. For instance, some homeowners have supplemented their income by renting out the extra space in their home. If this is an avenue you’re considering, be sure to research all local zoning laws and consult with a real estate attorney to make sure it is legal where you live.

Faulty finances aside, there are numerous other reasons why homeowners choose to downsize. Some get divorced, some are widowed, or as some people get older and the kids move out, these empty nests become too big or too hard to care for. Other factors include the desire for a more simplified and stress-free style of living without snow to shovel or grass to cut, which is especially true with seniors.

“Before any move, focus on how you want to live. People don’t think enough about why they’re moving,” said Mary Jo Zeller, director at Gero Solutions, which manages moves for seniors. “Increasing numbers of downsizers these days want to exchange the worry and expense of maintaining a large property for the luxury of low maintenance and the opportunity for more leisure time.”

One of the main barriers to downsizing are the emotional ties to the family home. However, deciding where to move and what style property will suit your lifestyle best can be just as daunting.

During the process of downsizing you may be surprised at how attached you have become to your possessions and how difficult it might seem to part with them. A good way to avoid becoming overwhelmed throughout the process is to start clearing out your home well in advance. Instead of getting rid of everything you won’t need in your new home, put the items to good use by donating or recycling them. You can even take advantage of eBay or give things to friends, family and neighbors.

To make sure all the items you plan on bringing to your new home fit, decorators recommend sketching floor plans of your new home to figure out how everything will fit. This way you won’t encounter any surprises when moving day arrives.

For more information about downsizing, contact our office today.

Published with permission from RISMedia.


Get a Head Start on the Spring Selling Season - List Your Home Now

March 8, 2012 3:52 pm

Now that March has arrived, homeowners across the country are getting ready to bid winter farewell and usher in spring, and the growing number of buyers that come with the season. While this winter has been anything but normal, those looking to sell their home should take into consideration that winter’s not over yet. In fact, in years past, some of the largest snowfalls and the coldest weather have occurred during the month of March. However, home sellers shouldn’t view this as a negative thing when it comes to selling their home. Preparing your home for sale and listing it on the market during March can also provide an edge over the competition in your area.

While the warmer months are generally regarded as the best time for home sellers to get their property ready for sale, marketing your home at the tail end of winter shouldn’t be taken out of the equation entirely. Even though the weather is colder this time of year, it’s important to remember that prospective buyers are out looking for homes 12 months a year and there’s no reason to drop the ball on getting your home on the market in March, before the spring selling season arrives.

If you’re preparing to list your home for sale this March, the first thing you need to do is make sure the home feels toasty when prospective buyers come to look around. If you are planning an open house or have showings scheduled, be sure to turn up the thermostat and make the home warm and inviting. If the house is cold, prospective buyers will more than likely race through the house. They may even start to question the windows and insulation.

If your home has a fireplace, winter showings provide the perfect opportunity to show the potential buyer how cozy a fireplace can be. Go the extra step and leave some marshmallows and sticks nearby and invite open house attendees to test the fireplace out.

For those selling in areas with heavy winter climates, if there’s snow on the ground, make sure the walkway is clear and the driveway is shoveled. Be sure to put down salt to control any icy surfaces as well. If a buyer pulls up to the house and has to slush through inches of snow, they may not even bother to get out of the car and tour the home. If you aren’t currently living in the home you’re trying to sell, hire someone who can come and clear away the snow before a showing.

While too much snow hasn’t been an issue in many parts of the country this winter, if the property is blanketed in snow, you may want to use photographs to help sell what the buyer can’t see. If you have a beautiful lawn, stellar landscaping or an outdoor pool or deck, many times these are quickly overlooked or passed by because of snow. Display any eye-catching photos of these amenities so buyers can get a better understanding of what the property truly offers.

There are still many real estate professionals and home sellers alike who don’t believe that trying to sell a home during the winter is a good idea, so the month of March is a great time to take advantage of the smaller competition. Many serious buyers often come out during the winter months, including corporate clients who usually need to relocate within the first quarter of the year.

Since a lot of people are waiting until spring to put their home on the market, being ready in March is a great way to beat the rush.

To learn more about getting a jump start on the spring selling season, contact our office today.

Published with permission from RISMedia.


Creating a Favorable Impression among Prospective Buyers

March 8, 2012 3:52 pm

If you’ve gone through the process of getting your home ready for sale recently, or are in the process now, you know just how important it is to put your home’s best foot forward. While making sure your home stands out from the competition visually is an important piece of the puzzle, appealing to prospective buyers’ other senses can be just as important, especially when it comes to the smell of your home.

While you may not think your home has a smell to it, freshening the air and filling the home with sweet aromas can do wonders in making a favorable impression among prospective buyers.

Most people know the trick of baking bread or cookies to entice the noses of those looking around a home. To achieve that fresh bread smell, buy a large loaf of bread, open up its belly and pour a bottle of vanilla essence into it. Then pop it into the oven at medium heat for half an hour before the showing.

REALTORS® also recommend the smell of cinnamon, French vanilla, butter cream or coffee to perk up those looking around.

“Scent impacts the atmosphere,” said Michelle Bardwell, an aromatherapist in Dallas, Texas. “You can create a delightful but subtle, aromatic space by using therapeutic grade essential oils.”

Bardwell recommends using Cardamom Essential Oil in the kitchen to create a sense of warmth, Lavender Essential Oil for the bedroom to evoke thoughts of relaxation, and a combination of Eucalyptus and Ravintsara for the bathroom.

“This will give the bathroom a fresh, clean aroma, and simultaneously kill bacteria and viruses on surfaces and in the air,” she said. “You should put several drops directly on surfaces and wipe down, and you can even put a few drops on the shower floor and in the toilet.”

Scented candles are another way to achieve a fragrant aroma within the home, but there’s not always time to let them burn before a showing. Another alternative is to use electrical plug-in products that have oil in them or potpourri pots to help provide continual fragrance.

While pets are often the most obvious odor that you want to mask, it’s best to stay away from scented sprays, as these are obvious indicators that you’re trying to cover something. Plus, some people find the smell of these sprays offensive, not to mention that some may be allergic to them.

Garbage cans also get smelly in a hurry, and sometimes you may not even realize the strong scents that come from opening your fridge.

“You want to send a positive image about every aspect of your home,” Bardwell said. “Kitchen trash does not send a positive message.”

Scents register in our brain and frequently remind us of our past experiences, so creating pleasant aromas in a house can help a prospective buyer experience an emotional connection with the home that may ultimately lead to a faster sale.

For more information about getting your home ready for a showing, contact our office today.

Published with permission from RISMedia.


In this Edition: Downsizing, Code Violations

March 8, 2012 3:52 pm

Our lead story in this month’s Home Matters, brought to you through our company's membership in RISMedia’s Real Estate Information Network® (RREIN), examines the importance of appealing to prospective buyers' senses when it comes to your home standing out from the competition. Other topics covered this month include how to get a jump start on the spring selling season and tax tips you should be aware of if you recently bought or sold a home. We hope you enjoy this month’s edition of Home Matters and as always, we welcome your feedback. Email us anytime!

Published with permission from RISMedia.


Digital Design and Sustainability among Top Hardware Trends

March 8, 2012 4:00 am

The 2012 International Hardware Fair in Cologne, Germany, revealed several major trends that transcended the geographical boundaries of the 50 countries represented, according to the North American Retail Hardware Association (NARHA). Technological innovation, lightweight model design and sustainability appear to be driving research and development in products across the globe for the year ahead.

Whether the economy is forcing consumers to be more efficient with their discretionary dollars or there is greater demand for increased usability and ease, products able to perform a variety of tasks continue to be in demand in 2012, but are now also featuring improved technology.

For example, Little Giant, a U.S. ladder company, is featuring a new industrial ladder that reads out ladder angles on a small digital display to ensure the ladder will not slip or tip over on the user. Other signs of digital advancements on display at the show included angle-controlled hand tools, such as wrenches, and Bluetooth- and USB-enabled products.

NARHA also reported that many exhibitors highlighted ergonomic and lightweight features on their tools. Although consumers today are demanding their products be more aesthetic and practical in design, they are also demanding the same—if not better—power and quality in these products. Anecdotal evidence suggests this trend is motivated by two main demographics: the elderly and the female sector.

Sustainability is also driving product development trends globally, as energy efficiency continues to be a growing concern for consumers across the country. NARHA reports products made with sustainable materials and fewer unneeded parts, to products with the ability to save consumers utility costs.

While traditionally it can take months or even years for European trends to hit the U.S. market, the more than 80 U.S. exhibitors in attendance also had an eye toward these trends, according to NARHA. U.S. consumers can expect to see this innovative product design in stores in the months to come.

Source: North American Retail Hardware Association

Published with permission from RISMedia.


How to Conduct a Financial Spring Cleaning

March 8, 2012 4:00 am

While the focus in spring usually turns to shampooing the carpets and cleaning the drapes, the change in seasons also presents a good time to weed out and organize your finances. Jodi Helmer from offers the following six steps for refreshing your financial life:
  1. Clear the clutter: The IRS requires taxpayers to maintain tax records for all income, deductions or credits claimed on their federal returns for at least three years. For all nondeductible expenses, Helmer says it’s ok to shred statements as soon as payment is posted to your account. Signing up for online statements and paying bills electronically will also reduce paper pileup but create electronic clutter. Be sure to back up all files stored electronically in case of a computer crash.
  2. Safeguard important documents: Financial documents such as savings bonds, life insurance policies, deeds and property titles and stock certificates should be stored in a fireproof safe or a safe deposit box at the bank. Create an inventory and formally authorize a trusted adviser or family member to get access to the material.
  3. Organize payments: Gather all recent credit card financial statements and list the amount owed on each one, along with minimum payments and interest rates. From there, establish a plan to pay off one card at a time. Though it's always fastest and most economical to pay off the highest-rate debt first, some people keep motivated by quickly paying off small debts completely, regardless of rate. Set up automatic payments for recurring bills such as car loans, the cable bill and your monthly mortgage.
  4. Consolidate accounts: Instead of keeping track of multiple credit card bills and statements from several checking, savings and investment accounts, consider which accounts could be closed or consolidated. Bigger investments draw better rates and juggling too many credit card accounts may make it easier to forget about payment due dates, increasing the likelihood of missed or overdue payments. Bear in mind that closing cards can temporarily trigger a decline in your credit rating. Be sure to hang on to your oldest cards as they provide a sustained track record.
  5. Shop for better interest rates: A little bit of research could net better rates on everything from your mortgage and car loan to your savings account. In comparing interest rates, read the fine print. For example, does a bank require a minimum balance to switch to a higher interest savings account? What are the terms and conditions linked to a zero percent card offer? What are the closing costs associated with refinancing a mortgage to a lower rate? Your credit card company may also be willing to grant an interest rate deduction.
  6. Assess current investments: Conduct an annual investment review. If you have an investment adviser, make an appointment to review your investment accounts. If you don’t have an adviser, consider hiring one. Your financial institution or employer may make referrals to financial advisers. If you're doing your own search, ask about education and experience as well as their fees. Planners may work on a fee basis, commission or a combination of both.

Published with permission from RISMedia.


Americans Not Maximizing Smartphones

March 8, 2012 4:00 am

While smartphones can perform a plethora of functions, according to a recent Harris Poll survey, very few smartphone owners are actually taking advantage of the time- and paper-saving potential of their devices.

Today’s smartphones can store information to make our lives more efficient – information that can be scanned to make a purchase, or displayed as a ticket for admission, allowing us freedom from printed confirmations and bulky wallets. However, when asked about a list of items that one could scan their mobile or smartphone for, only small minorities report having done so in each case.

According to the survey, only 5 percent of Americans say they have scanned their phone for admission to a movie or as an airline ticket, and fewer say they have done so to pay for clothing or electronics (3 percent), admission to a concert, live theater or performance (3 percent), to pay for a convenience item such as coffee (3 percent) or something else (7 percent). Two in five say they have never scanned their mobile or smartphone for any reason (40 percent) and slightly more say they do not have a mobile or smartphone with this capability (45 percent). Although Echo Boomers, aged 18-35, are most likely to have scanned their phone for all of the items listed, even they are not doing this at remarkable rates (between 5 percent and 10 percent for each item).

While few may be actively engaging with these functions, there is also a divide on the levels of comfort associated with these behaviors as well. Just under half of Americans (47 percent) say they are comfortable using a mobile scan as an admission ticket to movies, concerts or live theater performances, while 38 percent are not comfortable with it — with 25 percent not at all comfortable; 15 percent are not sure. About the same number of people are comfortable (41 percent) and not comfortable (43 percent) using a mobile scan as an airline, train or other transportation ticket; 15 percent are again, not sure.

Slightly fewer are comfortable using a mobile app that would allow them to make purchases at a retailer or company as they would with a gift card (39 percent) while 47 percent are not comfortable with this and 14 percent are not sure. The only item where a majority opinion is seen, is with using a mobile app that would store credit card information, allowing people to make purchases at a retailer or company as they would with a credit card; 63 percent are not comfortable with this with over two in five (45 percent) not at all comfortable. Only one quarter (24 percent) of Americans are comfortable with this, and 13 percent are not sure.

Looking at those who are comfortable with the various items, several noticeable trends emerge:
  • There is comfort in youth – younger adults are more comfortable than those older with each item listed.
  • Men are more comfortable with each item than are women.
  • Those who have scanned their smartphone for any one of a number of reasons are more comfortable with each capability than are those who have never scanned their phone, or do not have a phone with that technology.
According to Harris, the study implicates that, at the moment, technology capabilities are outpacing changing behavior—there are many new functions available that most people either haven't tried or admit to being uncomfortable with. While people like having the latest in technology, based on the wait lists and lines for newly released products, beyond early adopters, many people don't take advantage of the new functions available to them.

Published with permission from RISMedia.


Prints and Patterns Dominate Spring Designs

March 7, 2012 3:58 am

Spring 2012 is the season of pattern and print, and designer Laura Ashley is right in step with this current trend. 

Not just for fabrics, print can be extended beautifully to both sofas and also to wallpaper, says the designer. Patterned wallpaper is a highly effective way of creating character, mood and atmosphere within a room with little effort. Bold and vivacious, it can make a wall the focal point of a room’s design.

Laura Ashley – well known for a bold use of print and pattern – offers a set of newly developed designs for spring and summer, drawing upon the quintessentially British theme of the Laura Ashley brand and modernizing it beyond a tradition of floral design.

"To the Manor Born" is a collection inspired by the well-worn and well-loved English country house; traditional with a modern edge. The fabric inspired by an archive print implemented 24 years ago, called "Summer Palace." The design has been infused with newly ripened colors, with a palette evocative of the jewel-like shades of cranberry red, emerald green and sapphire blue against clean, ivory backgrounds. The design has also been made matt, rather than having a silk and shiny finish. The overall effect is fresh and relaxed.

"The Darling Buds Bedroom" is another collection that will create new shades of spring and summer in the home. The design is inspired by splashy, watercolor floral prints. It is ideal for spring and highly feminine. Multi-colored with a focus on pretty, delicate floral prints, the palette highlights pinks, yellows and greens against crisp white - hitting the pastel notes of this spring's fashion. The key feature of this story is its hand painted look, delicate and ornate.

Spring’s new patterns and home furnishing design trends can help add a fresh look to your home for the warmer months ahead. 

Published with permission from RISMedia.


Simple Tips to Make Your Home a Vacation Destination

March 7, 2012 3:58 am

As the economy gradually recovers, millions of Americans will be staying closer to home this spring and summer. Now is the perfect time to start getting your outdoor space ready for fun at home. With a little hard work and advice from the experts at HouseLogic, homeowners can quickly and easily get their home and outdoor space summer-ready.

For homeowners who want to expand their living space, this may finally be the year to add a new deck. According to HouseLogic, choosing the right material is the most important decision you’ll make about decking. While synthetic decking materials, such as composite and PVC decking, and tropical hardwoods like mahogany are initially pricier, they are easier to maintain and can last years longer. Although traditional wood decks initially cost less, the annual cleaning and resealing maintenance can make them more expensive over the long term.

If your home already has a deck, it may simply need some care and maintenance. First, give your deck’s structure a close inspection for rotting or cracked boards. Pound in any protruding nails and cut back nearby trees or bushes to prevent mold and rotting. Then thoroughly sweep and wash the deck; after it’s completely dry, follow-up with a sealer or stain.

Pavers may be a good alternative to a deck and are available in many different colors and finishes. Choosing patio paving materials begins with a solid foundation—the base that supports the pavers must be firm, strong and designed to stand up to years of foot traffic and weather. When it comes to pavers, there are many options, including brick pavers, which offer warmth and the possibility of intricate patterns; concrete pavers, which come in countless shapes and sizes and can be fashioned to look like real stone; a variety of stone, slate and marble; and even recycled hardscape materials, such as concrete sections from a neighbor’s old driveway or sidewalk.

If you have a pool, you may want to consider alternatives to chlorine. Chlorine is popular because it’s inexpensive and keeps swimming pools clean by sanitizing, oxidizing and deterring algae; however it also has a strong odor, reddens eyes, and causes allergic reactions in some swimmers. Chlorine alternatives include bromine, ionizers, ozonators or PHMB; but all four have drawbacks, including higher costs. 

With your pool and outdoor space in top shape, gather your family and friends and start enjoying the warmer weather.

Published with permission from RISMedia.