No Comments

How Much Should I Improve My Home?

Now that the decision to sell our home has been made, I need to put on my realtor hat.  A realtor will be able to optimize where to spend the money and how much to spend for a home to be ready to list. I get involved with my listing clients from the point where the decision is made to make sure they spend whatever their budget is, wisely. This is where me, acting as my own realtor is an advantage.  I have access to the data needed to get an idea of potential list price and to determine the approximate value of our home in its current condition.  With this data and some knowledge of comparable homes in the area I know what our maximum budget should be.  I want to bring my home up to the standard of the comparable homes without over-improving. Over-improving is often a waste of money.

Once I have my budget, I need to make some decisions about where to put the money.  I know all repairs must be done.  There is no point is waiting to “see if a buyer finds the problem” before paying for it.  As a seller, I am required to complete Seller’s Disclosure documents to disclose any problems that I know of with the house.  This is a signed, legal document.  In addition, buyers are going to have an inspection of the home done prior to closing, uncovering repairs that were not previously completed.  Bottom line is, I’m going to have to pay to repair it eventually, so I may as well take care of it before I list it.  From a buyer’s perspective, it shows that the home has been well cared for.  When buyers see needed repairs, they wonder what else is not visible that may turn up later. There are some minor repairs that my husband and I can take care of.  The two big items are a hot water heater and a new roof. Some insurance companies will not offer homeowners insurance on an older roof.  With all of our covered porches and the steep pitch of the roof, it is going to be very expensive, but if a buyer can’t get insurance approval, our home will never sell.

What elements of a home do you think buyers care most about? 

 

 

 

No Comments

Preparing My Home for Listing: Being My Own Client

So this is the family home.  For 20 years, my family celebrated, laughed, cried and made memories here in our home in Pewee Valley, KY.  We purchased at a time when there were still larger lots available and have a wonderful, wooded 3 acre lot.  It truly is picturesque with daily visits from the local deer just to put it over the top.  As a realtor, I have listing appointments with clients that would describe their home in a similar fashion;  with all of the love that comes from the memories of lives in their homes.  It has been my job and pleasure to get clients just like my husband and I into a home they love and that makes their lives easier.

My husband and I need to downsize.  While 3,800 square feet in the woods was a dream for years, it is too much maintenance as we are getting a bit older and with our children off starting their own lives.  It is difficult to let go even though I know its needed.  I’ve decided to approach our life change as our own realtor.  Those things that I do to help my clients through what can be an emotional process, can help us as we navigate the process.  I’m hoping that approach will help me to be more decisive and give me better perspective. Our ultimate goal is to sell our current home, to buy two homes: one, smaller, maintenance-free home here in the Louisville area where we have some of our family and a second place in the Tampa area of Florida where we also have family and where we hope to make a lot of new memories vacationing with family and friends.

I hope you’ll join me on this journey through a life change that many people face at some point in their lives, when time to enjoy life takes priority over home care and maintenance. Maybe you will be inspired to take on some projects in your own home.  Heck, if a woman in her 50’s can do the projects I’m going to tackle, you can too.

Do your parents still live in your family home? 

No Comments

Tax Deductions for Homeowners: How the New Tax Law Affects Mortgage Interest

By: Leanne Potts
Published: December 21, 2018
Tax changes for 2019 change the landscape for homeowners.

Tax season is upon us once again, and to make it even more interesting this year, the tax code has changed — along with the rules about tax deductions for homeowners. The biggest change? Many homeowners who used to write off their property taxes and the interest they pay their mortgage will no longer be able to.
Stay calm. This doesn’t automatically mean your taxes are going up. Here’s a roundup of the rules that will affect homeowners — and how big of a change to expect.

Standard Deduction: Big Change
The standard deduction, that amount everyone gets, whether they have actual deductions or not, nearly doubled under the new law. It’s now $24,000 for married, joint-filing couples (up from $13,000). It’s $18,000 for heads of household (up from $9,550). And $12,000 for singles (up from $6,500).
Many more people will now get a better deal taking the standard than they would with their itemizable write-offs.
For perspective, the number of homeowners who will be able to deduct their mortgage interest under the new rules will fall from around 32 million to about 14 million, the federal government says. That’s about a 56% drop.
“This doesn’t necessarily mean they’ll pay more taxes,” says Evan Liddiard, a CPA and director of federal tax policy for the National Association of REALTORS® in Washington, D.C. “It just means that they’ll no longer get a tax incentive for buying or owning a home.”

So will you be able to itemize, or will you be in standard deduction land? This calculator can give you an estimate.
If the answer is standard deduction, you’ll be pleased to know that tax forms are easier when you don’t itemize, says Liddiard.

Personal Exemption Repealed
One caveat to the increase in the standard deduction for homeowners and non-homeowners is that the personal exemption was repealed. No longer can you exempt from your income $4,150 for each member of your household. And that might temper the benefit of a higher standard deduction, depending on your particular situation.
For example, a single person might still come out ahead. Her $5,500 increase in the standard deduction is more than the $4,150 lost by the personal exemption repeal.
But consider a family of four with two kids over 16 in the 22% tax bracket. They no longer have personal exemptions totaling $16,600. Although the increase in the standard deduction is worth $2,420 (11,000 x 22%), the loss of the exemptions would cost them an extra $3,652 (16,600 x 22%). So they lose $1,232 (3,652 – 2,420).
But say their two kids are under 16, giving them a child credit worth $2,000. That offsets the loss resulting in a $758 tax cut.
The takeaway: Your household composition will probably affect your tax status.

Mortgage Interest Deduction: Incremental Change
The new law caps the mortgage interest you can write off at loan amounts of no more than $750,000. However, if your loan was in place by Dec. 14, 2017, the loan is grandfathered, and the old $1 million maximum amount still applies. Since most people don’t have a mortgage larger than $750,000, they won’t be affected by the cap.
But if you live in a pricey place (like San Francisco, where the median housing price is well over a million bucks), or you just have a seriously expensive house, the new federal tax laws mean you’re not going to be able to write off interest paid on debt over the $750,000 cap.

State and Local Tax Deduction: Degree of Change Varies by Location
The state and local taxes you pay — like income, sales, and property taxes — are still itemizable write-offs. That’s called the SALT deduction in CPA lingo. But. The tax changes for 2019 (that’s tax year 2018) mean you can’t deduct more than $10,000 for all your state and local taxes combined, whether you’re single or married. (It’s $5,000 per person if you’re married but filing separately.)
The SALT cap is bad news for people in areas with high taxes. The majority of homeowners in around 20 states have been writing off more than $10,000 in SALT each year, so they’ll lose some of this deduction. “This is going to hurt people in high-tax areas like New York and California,” says Lisa Greene-Lewis, CPA and expert for TurboTax in California. New Yorkers, for example, were taking SALT deductions around $22,000 a household.

Rental Property Deduction: No Change
The news is happier if you’re a landlord. There continue to be no limits on the amount of mortgage debt interest or state and local taxes you can write off on rental property. And you can keep writing off operating expenses like depreciation, insurance, lawn care, and utilities on Schedule E.

Home Equity Loans: Big Change
You can continue to write off the interest on a home equity or second mortgage loan (if you itemize), but only if you used the proceeds to substantially better your home and only if the total, combined with your first mortgage, doesn’t go over the $750,000 cap ($1 million for loans in existence on Dec. 15, 2017). If you used the equity loan to pay medical expenses, take a cruise, or anything other than home improvements, that interest is no longer tax deductible.
Here’s a big FYI: The new rules don’t grandfather in old home equity loans if the proceeds were used for something other than substantial home improvement. If you took one out five years ago to, say, pay your child’s college tuition, you have to stop writing off that interest.

4 Tips for Navigating the New Tax Law

  1. Single people may get more tax benefits from buying a house, Liddiard says. “They can often reach [and potentially exceed] the standard deduction more quickly.” You can check how much you’re likely to owe or get back under the new law on this tax calculator.
  2. Student loan debt is deductible, up to $2,500 if you’re repaying, whether you itemize or not.
  3. Charitable deductions and some medical expenses remain itemizable. If you’re generous or have had a big year for medical bills, these, added to your mortgage interest, may be enough to bump you over the standard deduction hump and into the write-off zone.
  4. If your mortgage is over the $750,000 cap, pay it down faster so you don’t eat the interest. You can add a little to the principal each month, or make a 13th payment each year.
No Comments

6 Simple Steps to Prep Your Home for Holiday Guests

6 Simple Steps to Prep Your Home for Holiday Guests
By: Lisa Kaplan Gordon
Published: November 14, 2011

Hosting has its shares of anxieties, especially if you’re striving to make your home welcoming.
How do you know everyone will feel comfortable?
And will you ever get a chance to relax yourself?
You will if you focus on what’s really necessary. Here’s a list of steps to get your home ready — and take the stress out of hosting.

Read more

No Comments

7 Hot Home Trends That Make Your Home Work for You

7 Hot Home Trends That Make Your Home Work for You
By: Lisa Kaplan Gordon
Published: May 13, 2011

Home improvement trends embrace energy efficiency, low maintenance exteriors, and double-duty space.

Today’s home improvement trends show that we like our houses to work harder and smarter for the money we spend maintaining and improving their value.We no longer want bigger; instead, we want space that’s flexible, efficient, and brings order to chaos.
We no longer want bigger; instead, we want space that’s flexible, efficient, and brings order to chaos.
We’re watching our wattage with monitors and meters, and guarding our weekends with maintenance-free exteriors.
Here’s a look at seven hot home improvement trends that improve the way we live with our homes

Read more