Tips to sell your home in the winter is a post from: Beth's Real Estate Blog

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 its 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 ceased 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.

These tips can be found on the IRS website.

This list was recently released as a Summer Tax Tip 2011-15

IRS Releases 10 Home Sales Tax Tips is a post from: Beth's Real Estate Blog

First, take mortgage rates during the peak of the bubble in 2007

30-year mortgage rates were in the low to mid 6% range. Today’s rates are in the low to mid 4% range, a drop of 33%.

Next, the median price for a single-family, resale home in Sonoma County peaked at $618,450 in August 2005. It bottomed out at $305,000 in February 2009.The median price has averaged over $327,000 since the beginning of the year. Yes, you missed the bottom!

O.K., so you are afraid to buy because you don’t know where home prices are going. Well, no one has a crystal ball, and, as Wall Street is fond of saying, the past is no predictor of future results. But, with the Fed saying it will keep interest rates low for the next two years, that should put upward pressure on prices.

I am presently working with two buyers that are taking advantage of this market. One sold their home at the height of the market and has been renting. I am sending them any new listings that come on the MLS that fit their criteria and they are making a drive by of each one and then calling me if it is something they want to see.

The other buyer is a long time client of mine that has the first home he bought from me and he is renting it out! He bought a new home, and then last year another small house to add to his rentals. Now he is looking at a fourplex that sold for over $700K in Rohnert Park. It is presently priced at $535K and he may make an offer later this week.

Is Now a Good Time to Buy Real Estate? is a post from: Beth's Real Estate Blog

Carbon Monoxide Detectors
Owners are required to install Carbon Monoxide Detectors in existing Single Family Homes on July 1st.

The Carbon Monoxide Poisoning Prevention Act of 2010 requires that existing single family homes with 1-4 units have carbon monoxide detectors installed by July 1st. Other existing dwelling units such as apartments, hotels and motels must have carbon monoxide detectors installed by January 1, 2013. The Transfer Disclosure Statement and Mobile HomeTDS contain disclosure language related to this requirement. There are no special carbon monoxide disclosure obligations beyond the TDS or MHTDS. Violation of the requirements is an infraction punishable by a maximum fine of $200 for each offense.

Carbon Monoxide Detector Required 7/1/2011 is a post from: Beth's Real Estate Blog

Please go to this website to participate:

https://realtorparty.realtoractioncenter.com/site/Advocacy?cmd=display&page=UserAction&id=1372&utm_source=site&utm_medium=banner&utm_content=rac&utm_campaign=mid2011&s_src=RAC_CFAMID1&s_subsrc=RAC_CFAMID1

For more information about the mortgage interest deduction, visit this website:

http://www.realtor.org/government_affairs/mortgage_interest_deduction

Thank you for taking the time to do this! 

C. Beth Robertson, Broker Associate
CRB, CRS, SRES,e-PRO, ASP
C21 Classic Properties, Inc.
Cell Phone 707-483-6566
www.bethrobertson.com

Information deemed reliable, but not guaranteed.

Preserve the Mortgage Interest Deduction is a post from: Beth's Real Estate Blog

To get an answer to the brief question I contacted Brooke Peros, a Credit Coach here in Sonoma County. I didn’t get a brief answer however. Here is how our conversation went:

I have been researching about how a loan modification will affect a credit score.  There is no simple black and white answer.   If there are already late payments then of course it will lower the credit score as with any account.  If there are no late payments then it will depend on how the lender reports the loan after the modification.   At the end of the day when the loan is modified IF it is reported as a settlement then it will drop the credit rating.  You would see something like, “account settled for less than legal amount owed.”   The good news is that not all the lenders do this.

The next part of it is the trial period of the new payment.  Sometimes the lender will report late payments during this time because of the new payment being less than the original amount.  This shouldn’t happen.  The government has set up guidelines that it should be reported as “a modified payment” and not late.  This could also impact the score negatively but not as severely as a late payment.

I hope this has added some clarity in a very gray topic.  I included a link that I think sums it up fairly well….

http://www.mortgageloan.com/will-a-loan-modification-affect-your-credit-3402.

Thank you Brooke for your research and in sights.  If you need to contact Brooke she gets her email at brookeperos@gmail.com and her website is www.CdCredit.biz. Her specialty is credit repair. I have worked with her to help folks avoid foreclosure, get loan modifications and/or consider short sales of their homes.

How will a home loan modification affect your credit? is a post from: Beth's Real Estate Blog

Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership.

Depending on the state a buyer lives in and his or her tax bracket, this deduction can reduce the cost of borrowing by one-third or more.

Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible.

Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don’t get.

Deductible homebuying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.

$250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit — $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months.

14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns.

Tax benefits of renting:

The only tax benefit that a renter can qualify for by virtue of being a renter is the home office deduction. This is a business deduction available to renters who own a business and have a home office they use regularly and exclusively for business purposes.

Some employees can qualify for this deduction as well. The deduction is limited to the amount of profit earned from the business each year. If a renter pays a lot of rent, this deduction can be substantial. Homeowners who are in business and have a home office can also qualify for the deduction.

Of course, the value of the tax benefits of buying a home depends on the state the buyer lives in and his or her tax bracket. Buyers who live in high tax states like New York or California get the most benefit.

This is why the blanket statement “it’s always better to buy than rent” is not always true. It all depends on the buyer’s individual circumstances.

You should encourage prospective buyers to run the numbers. There are some excellent websites you can refer clients to that have online calculators they can use to compare the costs of renting vs. buying a home.

A good rent vs. buy tool can be found on the Smart Money Magazine website: http://www.smartmoney.com/personal-finance/real-estate/to-rent-or-to-buy-9687/.

 Stephen Fishman is a tax expert, attorney and author who has published 18 books, including “Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants,” “Deduct It,” “Working as an Independent Contractor,” and “Working with Independent Contractors.”

A great place to look at the MLS for a home in Sonoma County is www.bethrobertson.com.

Tax Benefits of Buying a Home is a post from: Beth's Real Estate Blog

Here are some tips to consider:

1. Work with an agent who has access to foreclosure information.
Many home buyers assume that all agents have access to foreclosure listings. It’s important to ask.  And it is important to ask if they have helped a buyer with a foreclosure sale recently to be sure they understand the rewards and pitfall of purchasing a repossessed home. You can search for foreclosed listings in Sonoma County at www.bethrobertson.com.

2. Bank-owned properties generally close faster than short sales.
While short sales can be bargains, they also can take a lot longer or for that matter, never even close. Some banks will negotiate in a timely manner on short sales, but most will prioritize properties they have already repossessed.

3. Always offer less than the asking price.
Don’t assume that banks are firm on their price. For example, asset managers responsible for liquidating bank-owned Sonoma County condos are often willing to consider a lower offer. Have your agent check in with the selling banks agent to determine if there have been other offers of if he/she knows of other offers coming in.

4. Ask the bank to pay your closing costs.
The worst that can happen is that they say no. Sometimes buyers are surprised to find that banks can be quite accommodating when they want to. Also, be sure to have a pest inspection, home inspection, and other inspections these experts recommend so you are fairly sure of the condition of what you are purchasing. Your agent can advise you if you need to renegotiate after these inspections.

5. Get pre-approved from the right bank.
When making an offer on a short sale, it’s often strategically helpful to be pre-approved by the same bank that is authorizing the lower than loan amount sale of the home. During negotiations, this may tip the scales in your favor.

Buying Foreclosure Homes In Sonoma County is a post from: Beth's Real Estate Blog

The Appraisal Institute’s tips encourage homeowners and buyers to:

• Understand the role of appraisals.
• Make sure their lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute).
• Accompany the appraiser during the inspection of the property, if possible.
• Request a copy of the appraisal report from the lender.
• Examine the appraisal report and ask questions.
• Appeal the appraisal if appropriate.
• Ask the lender to order a second appraisal by a qualified and designated appraiser.
• File legitimate complaints with appropriate state board or professional appraisal organizations.
Buyers and sellers often find that the lending institution they are working with are not willing to ask for a second appraisal nor appeal the appraisal let alone assist in filing legitimate complaints with appropriate state board or professional appraisal organizations siting the reason as that “ it will simply hold up the loan process further”.

I look forward to the article from the Appraisal Institute that will address these issues.

Home Appraisal Guidelines for Buyers and Sellers is a post from: Beth's Real Estate Blog

Here, Lowe’s offers 10 designer tricks to help you make any room look larger:

1. For the illusion of a larger room, use a color scheme that is light rather than bright or dark. Pastels, neutrals and white are all color possibilities.

2. Use a monochromatic color scheme on the furniture, rugs and walls. Select different shades and textures of your single color.

3. Lighting is a key element in opening up a space. Recessed spot lighting is visually appealing and is perfect for a small space. A torchiere light is great for bouncing light off of the ceiling and back down on the room.Skylights and solar tubes are natural alternatives for adding light to a room.

4. Limit the number of accessories to avoid the cluttered feeling.

5. The floor and the ceiling are the fifth and sixth walls of every room. A light-colored flooring such as light oak or a light-colored carpet will make the room appear brighter and more open. The same applies to the ceiling—use a light color or white to “open up” the space above.

6. Increase the appearance of the size of the room by adding wall mirrors. They not only reflect images, they reflect light and color. Be a little daring! Use mirror tiles to mirror an entire wall. Your room will appear to double in size.

7. Don’t place too many pieces of furniture in a small space. A love seat may work better than a full-size sofa depending on the size and shape of the room. Add two medium-sized chairs or two small wood chairs. Place the chairs closer to the wall and then pull them into the area when additional seating is needed.

8. Add paintings or prints to the walls. One large painting works better than a group of small paintings.

9. The visual balance of a room is also important. A large, brightly colored element can overwhelm a room and decrease the appearance of space.

10. A glass table, whether it is a dining, coffee or end table, will keep the appearance of an open and free space.

When you are ready to market your home I offer a free one hour consultation on getting your home ready for market as well as the current market valuation. You can also search my site at www.bethrobertson.com for valuable premarket preparation of your home to go on the market.

Making a small room look larger… is a post from: Beth's Real Estate Blog