Selling Your Home? The IRS Wants (to help) YOU!

The friendly IRS has come out with their Summertime Tax Tip for 2011! Read and learn...

"Ten Tax Tips for Individuals Selling Their Home"

1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of this sale.

2. 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).

3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return.

5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.

6. You cannot deduct a loss from the sale of your main home.

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and 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. Repayment of the full credit is due with the income tax return for the year the home cased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.

10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

Whew! Did you get all of that? No sweat ... Well, for more information about selling your home, see IRS Publication 523, Selling Your Home. This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Would YOU Sell By Owner? You Gotta Read THIS!

When we first got into the real estate business, For Sale By Owner was really popular. There were several competing For Sale By Owner type brokers, and it seemed that a new one was popping up every week or so! Where have they gone? I was thinking about that the other day ... You just don't see much of those professional For Sale By Owner companies around anymore.

I just read an article that I have to share with you. The founder of ForSaleByOwner.com used a real estate agent to sell his New York apartment after he was unable to sell it by owner for six months. The agent came in, raised the price, and got multiple offers!

This is such an unusual story. For one thing, when owners put their homes up for sale themselves they typicall ask too MUCH, not too little! Even at the height of the home sales frenzy, many, many For-Sale-By-Owner sellers priced themselves out of the market. But that is not the point of this story.

The point of this story is that a good real estate agent knows the market! I have always loved real estate and I thought I kept a good eye on home prices when I wasn't selling real estate full time. I really figured I knew pretty well what was going on. Since being in real estate full time for nearly 10 years, I have learned just how wrong I was! The actual value of a home has so many variables that it was next to impossible for a lay person - even a lay person as crazy about real estate as I was, to have a pulse on the home market!

Only a full time professional has the "luxury" of spending hour upon hour, day after day, month after month and year after year studying and searching the multiple listings (which change daily) and reading every article about real estate, construction and lending that hits his inbox. I do it because it's my job, and because I LOVE IT!

So I say, "Good for you, Mr. inventor of forsalebyowner.com!" I am truly glad you sold your apartment and got a fair market price for it as well. That is what us professional REALTORs wake up to do each day!

To read the entire article, click here

http://realtormag.realtor.org/daily-news/2011/08/09/forsalebyownercom-founder-uses-agent-sell-home?cid=WR08092011:26043&ed_rid=230212

SELLERS! Don't Get Scammed!

Misfortune seems to bring out the good in most people; however, there are always some out there who wish to turn someone's misfortune into good for themselves alone!

A new study by CoreLogic shows banks and distressed home sellers will lose more than $375 million this year by selling undervalued houses to third-party buyers, which generally result in a quick sell and profit and tend to be fraudulent sales.

According to law enforcement and banking industry experts, the fraud works like this: Investor groups partner with local real estate agents whose job is to spot borrowers in financial distress and persuade the homeowners to sell to investors in a short sale at a low price. Then, the agent contacts the bank with the investors'
short-sale offer. So far so good. At least it appears so!

Meanwhile, the agent finds a buyer who wants to purchase the property for a higher price than that which the investor buyer is paying for the property, but the agent never presents this offer to the bank, nor does he tell the homeowner about this buyer. This new buyer knows nothing about the investor. To back up the investors' low offer - the only offer the bank is aware of - the agent produces an appraisal that confirms the low valuation. The bank then approves the sale and the investment group purchases the property. After the closing, the investors then sell the house to the other buyer at a higher price. The agent and investors then split the profits. The original homeowner never knows what hits them!

How do you keep this from happening to you? Or your friends who may be considering selling their home "short" in order to keep from foreclosure? Use a REALTOR you can trust. One who has experience in Distressed Property Sales. One who is looking out for the best interest of the seller.

I have had many years of experience in foreclosures, pre-foreclosures and short sales, on both the buyer side and the seller side. I am a Certified Distressed Property Expert. And most importantly, I can be trusted. Call me with any questions you have about your property - what it is worth, should you short sell or foreclose? Can you get a loan remodification? What options do you have? I would be glad to help you!

How-To Videos on YouTube About Homebuying

Especially in today’s housing market, the prospect of buying a home can seem overwhelming for many Americans who may not be aware of how to begin the process of shopping for a home or even a mortgage. To help navigate this process, the U.S. Department of Housing and Urban Development (HUD) and the National Association of Realtors® (NAR) unveiled three how-to videos to help prospective homeowners find a home they can afford, shop for a mortgage they can sustain, and what to expect when they go to closing.

“Educating consumers about the home buying process is at the heart of what Realtors® do,” said 2010 National Association of Realtors® President Vicki Cox Golder. “Informed home buyers create the conditions necessary for responsible, sustainable home ownership, and we’re very happy to be a part of this project.”

HUD’s videos are easily accessible from both HUD and NAR’s websites as well as from HUD’s YouTube channel. They include:

Shopping for your Home – The homebuying process obviously starts with finding a place you’ll want to call home. This short video will instruct viewers on assessing how much of a home you can afford, working with a real estate agent and what happens once you find the home you want to buy. Housing counselors can assist home buyers and home owners on issues such as home buying, fair housing, credit issues, and foreclosure prevention.

Shopping for your Loan – Once you’ve found the home of your dreams, the next step is to shop for a mortgage loan. This video will help prospective buyers use the good faith estimate (GFE), which is a form that spells out the terms of a loan offer, to shop for the best loan for them. Viewers will learn how to use the GFE to determine how long an interest rate is available for a particular loan and how to identify key loan terms and costs of a particular loan offer. HUD suggests buyers shop and compare GFEs from multiple mortgage brokers and/or lenders in order to get the best loan for their situation, and I heartily concur.

Closing the Deal – Finally, this video walks the viewers through the actual closing process including how to make sure the loan they were offered closely matches what they encounter at the settlement table. In particular, HUD will walk the viewer through the HUD-1 Settlement Statement and demonstrate ways buyers can compare their actual costs with those reflected on their Good Faith Estimate.

HUD partnered with NAR because a real estate agent is often the primary point of contact for homebuyers and HUD believes real estate agents are in a great position to provide these videos to their clients as they move through key areas in the homebuying process.

To view HUD’s new homebuyer education videos, visit HUD’s YouTube channel at www.youtube.com/HUDchannel.

As Your Personal REALTOR, I am here to answer any of your personal questions about homeownership, buying, selling and avoiding foreclosure. Don't hestitate to contact me!

Buyer Turn-Offs: What to Do if YOUR House is a Turn Off!

We talked about the features buyers look for, and some things you can do and should NOT do to make sure you show your home's best side to buyers. Now, I want to talk about the top buyer turn-offs, and what to do if your house fits the description.

The top turn-offs for both men and woman are structural damage, bad odors, a busy street, and an awkward floorplan.
First of all, a homeowner must accept reality that if any of these features apply to their home, it will make their home less desireable than a home that does not have these features. Therefore, the home must be priced below a comparable home in size and location. A buyer will naturally buy the home that appeals to them the most within their budget. Reduce the price, and you appeal to a buyer who normally could not afford a home in your area, or a home with as much square footage, or a home with a beautiful yard, etc. There is a buyer for every home, I assure you!

1. Let's take Structural Damage. This often happens to homes that were rentals for a long time, or perhaps the home was owned by folks who became disabled and could no longer either afford to keep the home up or just didn't notice the problems occuring. Perhaps there was a leak in the attic or under the house that slowly caused damage. What to do?

You have three choices: Repair the damage before you put the house up for sale, or sell the house as it is with the knowledge that much of the repairs will need to be paid for by the seller in escrow, or sell to a cash-only buyer. The fact is that unless the price of a structurally damaged house is considerably below comparables, a buyer will not purchase the home without having the damage repaired. Most buyers do not have the capital to repair structural damage. Also, if the buyer is getting a loan on the home, most banks will not loan on a home with structural damage. As your agent, I would assess what the damage is when I list your home and make recommendations based on what I observe.

2. Bad odors. It's a fact of life that we all get used to the smells in our own home! Even some odors that would knock a visitor down seem to go undetected by the resident. Obviously bad odors are a turn off, and if a home is listed without the odor having been eradicated, buyers will run the other way. What to do?

Before you list, get rid of odors caused by cigarette smoking, animals and relaxed house cleaning. Often carpets need to be replaced and walls painted to get the home smelling show-ready. Ask a friend you trust to come over and give your home the sniff test. If you choose to sell your home as is - odors and all, expect to have to lower your price below the comparables to get any buyer interest.

3. A Busy Street. This is a tough one, but not impossile to deal with. Your sales price will have to be adjusted regardless of what you do, but it is possible to make your home appealing even on a busy street. I would recommend putting in dual-paned windows at least on the side of the traffic. Dual-paned windows are a great selling point all over the house, and I would definitely recommend replacing all windows if they are single paned.

Next, I recommend a fountain in your outdoor space. A nice tinkly one that distracts from the street noise. I actually live with a busy street behind my home, and we have a wonderful fountain outdoors. Visitors rarely comment about the street noise, and we rarely notice it.

Plant screening plants to block the view of the busy street from windows. And of course, make sure your home is clean and staged before listing!

4. And lastly, the Awkward Floorplan. If you've got it, you may not even know it, you are so used to it. Buyers are looking for open floorplans these days. If you have no remodeling $$$ to remove walls, you must know that your sales price will need to be below the comparables to make up for the floorplan. Sounds ridiculous, but buyers know what they want.

For floorplans that are set in stone - no way to change it - I would recommend focusing on the positive features of your home mentioned in my prior article. Make sure you have a killer backyard, or a killer kitchen. Something that stands out that buyers want that makes up for the floorplan. Make sure your home is clean and freshly painted. As your agent, I will help you arrange your furniture to distract from the floorplan.

There IS a buyer for every home. Sometimes it takes elbow grease, and often it takes being realistic about the features your home is lacking and the turnoffs your home has that you have no control over, and adjusting your price to compensate. As your agent, I will evaluate your home and take your home's best foot and put it forward and center in order to get you the best possible price in today's market!

Home Sellers and Landlords

If you are planning to do some renovation to your home before you sell, or if you are a Landlord, and your property was built before 1978, it may pay you to read on.

Starting April 22, renovations that disturb lead-based paint in older homes and child-occupied facilities must now generally comply with the Lead-Based Paint Renovation Rule of the Environmental Protection Agency (EPA).

Under the newly implemented rule, renovators of target housing built before 1978 must now be trained and EPA-certified to perform safe work practices to prevent lead contamination. Landlord's renovating their properties must deliver EPA's lead renovation pamphlet to their tenant within 60 days before a project begins (and, if mailed, at least seven days before a project begins). Renovators must also obtain the tenant's signed acknowledgment of receipt or substitute documentation as specified.

The EPA issued this rule in 2008, but delayed implementation until now. The rule generally applies to building contractors, handymen, residential landlords, property managers, and anyone else who is paid to perform renovations or to direct workers to perform renovations as specified. The lead renovation rule does not apply to homeowners renovating the homes they live in. However, sellers of target housing must, among other things, disclose to their buyers any known lead-based paint and lead-based paint hazards (C.A.R. Form FLD). Home buyers today are certainly more environmentally aware than ever, so when in doubt, it always pays to seek the advice of an informed real estate professional.

Renovation work covered by the lead renovation rule is defined as a modification of an existing structure that disturbs a painted surface, such as surface restoration or surface preparation activity. Excluded are minor repair and maintenance activities that disrupt up to 6 square feet of interior painted surface or 20 square feet of exterior painted surface. Demolitions and window replacements are not considered minor repairs.

If you need more information about the lead renovation rule, just email me and I will send you a legal article entitled Federal Lead-Based Paint Renovation Rule. You can also go to the EPA's Renovation, Repair and Painting webpage which includes the new requirements, pamphlets, and other resources. To locate an EPA-certified renovation firm contact me for a company nearest you, or go to http://cfpub.epa.gov/flpp/searchrrp_firm.htm.

HOME PERSONALITY ANALYSIS?

Your home has a definite personality, and if your home is for sale, or if you are considering putting your home up for sale, it is important that you get to know your home in a new way. And, YES, homes are still selling in San Diego County! But it is more important than ever to understand what makes a buyer buy!

First Impressions Count

If you had a dinner invitation for the first time to the home of your prospective in-laws my bet is that you would want to make a good first impression. Although you might like to wear jeans with holes in them around the house with a comfortable T-shirt, chances are you wouldn’t dream of showing up in that attire to a first-time meeting! It makes no difference that your fiancé loves you just the way you are. You have a good impression to make and now is the time to put your best foot forward.

Your home is no different. When a prospective buyer drives up to your home for the first time, they will subconsciously notice your home’s “personality,” and this personality will greatly affect their first and most important impression – and the decision whether or not to buy your home. The questions is- If your home is for sale, which personality do you want to put forward?

The Neglected Home – You’ve seen it. Bank-owned/foreclosed homes have this appearance. This home could also be a divorce situation where no one could decide who would do what. Weeds, browning grass, and unswept walks give zero curb appeal. Inside, it is obvious that maintenance and care has been little to nil. Curtains are tightly closed; there is no electricity or heat. This home has a sad personality. No one is going to “fall in love” with this home. It has one hope for getting sold- PRICE. It must be lower than the comps in the area. These homes WILL sell and will sell fast when they are priced to sell.

The Old-Fashioned Home – This home has usually been owned by the same family for its lifetime. Curb appeal may be fair, but the front door and windows would be original. The carpet, flooring, window coverings, fixtures and appliances are unappealing. The color scheme hasn’t been updated since the 1980’s when mauve and baby blue were all the rage! There is really nothing wrong with this home except the fact that you get the feeling you are Back to the Future! Some buyers will see past the home’s dominant personality and imagine updates, but only if the price is right. By right, it must be, once again, lower than the comps in the area. If not, the buyer will buy the home two blocks over that has new windows and appliances, or even The Neglected Home, that has a better price.

The “Different” Home – Some homes have a floor plan that is just plain, well … different! It starts with the curb appeal when you’re not quite sure where the front door is located. Inside, the entry faces a wall or coat closet, or some other part of the house that is unusual. Perhaps the home has been added onto and walls have been removed (or not) and in order to get to the family room or kitchen you need to walk down a hallway past the bedrooms. Room sizes may not appear to make sense, with a huge dining room and tiny kitchen, or vice versa. As a homeowner, you are used to your home being different; however, the majority of the buying population will not find this “different” personality practical or appealing. Unfortunately, the only hope for selling this one is, once again, a price that is lower than the comps in the area. Otherwise, the buyer will purchase a Neglected or Old-Fashioned Home that has the layout that appeals to them.

The Grandma Home – Hey, we’re all going to get there, and the truth of the matter is that when our homes grow old along with us, buyers know it when they see it. This home is similar to the Old-Fashioned Home. Pictures of the grandkids and ancestors are in every room. There is a towel across the back of the chair for the cat and doggie stairs next to the bed. The house has lots of lace and doilies. Though the grandkids love to visit, a buyer may have a hard time imagining living in The Grandma Home. Once again, this home must be priced below the comps in the area or it will languish on the market alongside The Old-Fashioned Home and the “Different” Home.

The Friendly Home – Buyers’ eyes light up when they drive up to this home. There are flowers in the flowerbeds and on the porch. The yard and front door are well maintained and say “welcome.” The home is spotless and clutter free. The walls are freshly painted; woodwork and carpets clean or new. Appliances and countertops are not grossly out of date. Window coverings are current. Buyers will typically fall in love with this home regardless of the age of the home. If priced comparatively to what has recently SOLD nearby, this is the home that brings multiple offers.

So what if your home is not The Friendly Home? Is it possible to get a better price? Yes. The key is DRESS TO IMPRESS! I am a firm believer in staging your home to bring out the best personality possible. Water your lawn. Trim shrubbery. Do those honey-do tasks around the house. Take a couple of weeks and declutter. You are going to be moving, so begin packing, leaving only select decorative items in view. PAINT! Paint your walls and either paint or clean your front door. Buy a new welcome mat. Change the hardware on the door if it is outdated. That, alone, gives a great first impression. Wash all windows and screens inside and out. Remove old, broken blinds and old broken anythings and take them to the dump. You are better off with no window coverings than outdated or broken ones. Update your bathrooms and kitchen if at all possible. Hang new towels and a new shower curtain. Buy new bath and kitchen rugs.

YES, homes are selling; buyers are buying! But in order for your house to sell it is imperative that you make a The Friendly House first impression, and price your home in line with homes that have recently SOLD. Long gone are the days when sellers can ask a price they have in their heads “just to see if anyone will buy it for that.” Location, price and condition (personality)! That is what will sell your home!

Debbie and I would be happy to give you a free Home Personality Analysis with tips on what you can do to Friendly-ize your home for market. Call us or email us anytime!

(Thanks to real estate agent Kristi DeFazio of Colorado for the use of her ideas for this column!)

Columnist Confronts Data, 'Zillow Bogeyman'

We've all heard of Zillow. As real estate agents, we find it interesting to see what "value" they put on the homes we have listed. It is rare that we find their estimation line up with what we see from the actual comparisons we make using sold criteria from the MLS. I thought these articles summed up their misinformation wonderfully.

Zillow is in business to make money, which isn't a bad thing - we are all in business to make money. The Multiple Listing Service, though it does indeed make money, is supported by real estate agent's yearly fees, which are substantial! The use of Zillow by consumers and by real estate agents is free, unless you choose to advertise your business. Zillow makes it's money with advertising dollars, so it is important for them to keep their name in the forefront. The MLS makes it's money from agents, who input specific data to get specific answers on a specific home at a specific time period, etc. Our comparisons don't lie.

Zillow is good at what it does - draw consumers to check on the value of their home. But please do not take their values as gospel. Call us and let us use the same criteria your lender will use and the buyers who are looking for homes will be using! That is why we pay the MLS the big bucks! Read this link!

http://web03.echomail.com/remax/l.asp?t=H30&e=zvxrjvyzref~lnubb.pbz&c=8521a3db6892b7166