Local Real Estate News

 |  March 2017

Tax Advantages of Owning Real Estate

Usually, it would be expected that the government would take money for the real estate that you own. Since you are gaining a profit off of it for a livelihood it should work like any other job that you have. However, you can take advantage of several tax breaks for your real estate, all which will help you with the ownership of your property.

p>If you own a home, then you can also expect for it to be tax deductible. All home related expenses and refinancing that you decide to do for your home will be a way for you to take off money at the end of the year. You can also receive tax deductions from the mortgage interest that you pay. If you just own a home or if you are considering home equity, you can easily find a way to break off some of what you would owe.

When you are working on owning a home, you will be paying property taxes in your monthly payment towards your loan. If you have been paying these taxes throughout the year, they will be deductible on your taxes. In order to make sure this is part of the deduction, you will have to get a statement from the person who carried out the loan as well as find the interest that is connected to the property taxes that you have been paying.

If you have to sell your home and owe tax, you can allow a request for tax relief. This will be given to you by the IRS if they find a significant cause in selling your home. If there are uncertain circumstances that have forced you to sell your home, than the IRS can give you some benefits in taxes.

By finding the necessary forms and conditions, you can easily benefit by gaining tax relief with your ownership. You can easily find how to do this by researching possibilities and finding what the categories are for getting a tax break for the year.

These are all general benefits of owning real estate, for information on your own available tax breaks and how to fully cash in on the tax benefits you should talk to your tax advisor.

Clean Home, Increased Interest

One of the biggest problems people run into when selling their home is the process of preparing it for sale. Many homes are simply places where we keep the accumulated treasures of the years. Are you a clutter-bug, a pack-rat? It's OK, we all are to some degree. When preparing a home for sale, we need to be mindful of our "stuff." The best way to begin this process is to take a quick walk through your home. Make a list of everything that you have not used in the past 3 months, 6 months? Now, and here is the hard part. Get rid of it. Seem a bit extreme? It might, but things that you have not used in half a year are not likely to get used in the future. Remember we are trying to get rid of some stuff so that people can see the house, not what's in it.

There is a common line of thought that home buyers want to see the "personality" of the homes current owners. This is not true. Buyers want to be able to see their belongings in the home. They want to put their personality into it to see if they could see themselves living there. A backlog of your stuff will get in the way of them doing this. Go through every room in turn and remove the clutter! This includes the closets, shelves and cupboards. Also remove excess furniture if the room seems too crowded. Here is another important thing to remember, don't put all this stuff in the garage! Buyers will go through the garage like any other room in your home. Hire a storage locker if it is really necessary. Aside from that, use this as an opportunity to rid yourself of those things that you never use.

The minimalist approach is a good thing to utilize when showing your home. The lack of personal effects will make it easier for buyers to place themselves in your home. This will also make the moving process easier on you. With less things to pack when moving day comes, you can dedicate more time to creating your perfect space in your new home.

What Makes a Home Green

While "green" has become quite the buzzword when it comes to home building and design, what exactly it means isn't always clear. There are a few standards for eco-friendly homes, but the term "green" doesn't have a universal definition beyond being a color made by mixing yellow and blue. So how does a consumer know when a home the builder is calling "green" is actually built with an ecological focus, or at least enough of one to justify its price?

Some of the standards for ecologically minded homes include increased insulation. To be really energy efficient, a home should be insulated beyond the minimum local requirements. This includes floor insulation, which in some cases is built right in to the concrete foundation. In addition to the walls, floors and ceilings, windows should also be insulating. Therefore, double paned and/or vinyl windows are becoming the "green" standard.

Energy efficiency should be continued throughout the home. Low water use toilets are a must, and those that have different flush options are extra eco-concious. These options allow you to have a more efficient flush for solid waste, while liquid waste just gets much more conservative flush. Shower heads, washing machines, faucets and dishwashers can also be equipped to limit the water used without compromising function. Air conditioners, refrigerators, heaters and all other appliances within the home should be of the highest standard of energy efficiency. In addition, compact fluorescent lights should be used throughout the home, or replaced by LED lights wherever those are suitable.

Beyond energy efficiency, use of non-toxic, ar at least less-toxic, materials is important in "green" homes. Look for a home with low VOC paints. VOC stands for volatile organic compounds, which are toxins that gas-off from conventional paint. Remember the lighter the pigment, the lower the VOC's, so white or off-white walls are healthier than some of the bolder, trendy colors. This is because it is the paint base that is quality controlled, but it is impossible to take the VOC's out of some pigments.

Another finishing detail that is popular for eco-friendly homes is bamboo or cork flooring. Bamboo is popular because it grows so quickly. It takes about five years to grow bamboo to the right size to make flooring. It is versatile and comes in a variety of styles and colors. Cork is an option because it is sustainable to harvest - removing cork does not damage the cork tree, as it replenishes its cork bark every year anyway. Cork makes a lovely, soft and springy floor surface that is also naturally warmer than many other flooring options.

For our final indoor consideration, eco-friendly homes will use more natural fabrics such as wool and cotton for carpets and window dressings.

Outside the home leaves plenty of room for "green" considerations, too. Xeriscaping is a popular means of landscaping utilizing plants native to the area being built in. These plants are naturally drought-resistant because they are acclimatized to the local environment, needing less watering and maintenance than lawns or beds full of foreign flowers.

Another "green" outdoor trend is utilizing permeable paving stones. These actually absorb water, which then is naturally filtered through the earth and goes back into the ground-water supply. These avoid the toxic run-off that can be caused by water rushing over cement and into drains, carrying oil and exhaust residue straight into the drainage system, which ultimately ends up being a nearby body of water.

If a home you are looking at is being promoted as being "green", don't hesitate to ask the builder about some of these features. If they don't measure up, don't buy it.

Existing-Home Sales Jump in January

Existing-home sales stepped out to a fast start in 2017, surpassing a recent cyclical high and increasing in January to the fastest pace in almost a decade, according to the National Association of Realtors®. All major regions except for the Midwest saw sales gains last month.

Total existing-home sales , which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, expanded 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. January's sales pace is 3.8 percent higher than a year ago (5.48 million) and surpasses November 2016 (5.60 million) as the strongest since February 2007 (5.79 million).

Lawrence Yun, NAR chief economist, says January's sales gain signals resilience among consumers even in a rising interest rate environment. "Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home," he said. "Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions."

"Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range," added Yun. "NAR and realtor.com®'s new ongoing research — the Realtors® Affordability Distribution Curve and Score — revealed that the combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income."

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage decreased slightly in January to 4.15 percent from 4.20 percent in December. The average commitment rate for all of 2016 was 3.65 percent.

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