Tax Benefits of Home Ownership and more

Tax Benefits of Home Ownership and more.  Early-Group

When it comes to owning a home, there are several benefits that tax payers may take advantage of when filing their itemized return. Here are just a few to consider when preparing your taxes:

  • When purchasing a home, some closing costs may be deductible. Discount points and origination fees are tax deductible to the buyer. If these apply to your mortgage.
  • If you took out a loan to purchase your home, the mortgage interest is typically deductible in the year in which it was paid. This adds up quickly in most federal tax brackets. Your deduction may be limited if certain circumstances apply in higher tax brackets, or if you took out a mortgage for reasons other than to buy, build or improve your home.
  • Real estate property taxes also provide a tax benefit. In the year you purchase the home, you are entitled to deduct the real estate taxes paid on your settlement statement either to an escrow account or directly to the taxing authority. You may continue to deduct property taxes annually during your home ownership.
  • Mortgage Insurance Premiums (MIP) or Private Mortgage Insurance (PMI) may also be deductible when your down-payment is less than 20 percent. Several changes took effect on June 3, 2013 regarding cancellation and increases to the annual MIP, so it is best to consult your accountant or tax preparer to ensure you accurately claim any deductions
  • Do you work from home? If you have a home office that you use only for business, you may have a deduction for a portion of some items such as mortgage, insurance, utilities or other expenses relative to the office space. There are many considerations when deducting home office expenses, and it may or may not be a benefit to you based on your occupation and overall business use.
  • When selling your home, there are potential tax deductions as well as possible implications to consider. Some closing costs may be deductible including and not limited to real estate commissions, title insurance, legal fees, and surveys. Capital gains or losses may apply, and your tax expert can advise you on determining your basis and adjustments.

Some online resources that may be helpful regarding other home ownerships tax benefits include the Internal Revenue Service or National Association of Realtor (NAR).

A recent item to note regarding married tax filings… A new federal ruling now recognizes married same-sex couples just as their heterosexual counterparts for federal tax purposes regardless where they ultimately live. The Supreme Court ruled that married same-sex couples will be treated as married for federal tax purposes, including income as well as gift and estate taxes, but this ruling does not apply to registered domestic partnerships/civil unions. This covers couples who marry in one state and move to another that may not recognize their union. As a result, lawfully married same-sex couples no longer have to declare themselves unmarried on federal income tax returns, and spouses will not have to pay tax on health insurance benefits received through a spouse – an average savings of $1,000 tax per year for same-sex couples. Changes could be especially significant on estate taxes, where spouses benefit from tax advantages. For more information, the Wall Street Journal published a review.

Disclaimer: The links to articles and resources here are only to be used for informational purposes. Tax payers should always seek professional advice on financial and legal matters from a tax preparer, accountant, attorney or other legal counsel.

CO Residential Inventory: Beyond the Numbers

Today’s real estate market is in the news and on the minds of all buyers, sellers and real estate brokers.  Demand is high and record-low home inventory is sending prices up, blurring the affordability line for some consumers.

However, not all inventory situations are equal. Here is a snapshot of some notable differences in inventory in parts of the Denver Metro, including Boulder, as well as the mountain communities of Conifer and Evergreen.

CO Home Inventory: Beyond the Numbers

Through April 2014 in Colorado, inventory was tightest for Denver homes priced up to $250,000. The number of active listings in this price range dropped 73% in units for sale this year, compared to April 2013.

To understand the story behind the numbers, it is important to drill deeper into the market. For example, inventory overall dropped 53% for homes priced up to $500,000, comparing April 2014 to April 2013. However, a different picture emerged in the Highlands Ranch market. There, the number of active listings was down 72% compared to last year in the same price category.

Here are some other interesting examples:

  • Notably, listings for homes priced $1 million and up did not post such dramatic declines. In the City and County of Denver, where certain neighborhoods are historically desirable, the number of listings available from $1 million dropped 36%.
  • In Castle Pines Village, a gated golf community of luxury homes sited in a spectacular scenic setting, the number of active listings was down just 24% for homes priced at $1 million and up.
  • In Vail Valley’s resort property market, Beaver Creek’s inventory was termed “moderate to strong” for homes in the $1 million to $2 million range in March 2014, based on the most recent data available at The Insider’s press time.
  • Inventory for homes in the $1 million and up price range in the town of Breckenridge was down about 19.3% this spring, compared to spring 2013.
  • In the city of Boulder, where the average home price is now more than $723,000, inventory for homes across all price ranges was down 19.2% this April, compared to last year.

Call Terry Robinson and The Early-Group for more information about your area.  303.748.3838

Marijuana is Starting to Intersect with Real Estate

You don’t think of the changing status of marijuana in many states as having a real estate impact but it does. In the states where medical marijuana is decriminalized (and in Washington and Colorado, where it’s decriminalized even for non-medical use), landlords and their rental agents have a disclosure issue on their hands. The landlord has to decide whether or not the rental property accommodates marijuana use, and if so, the rental agent has to be sure to adequately disclose the policy to prospective tenants. That’s just one of the issues stemming from the changing legality of this controlled substance.

The marijuana issue is one of several trending legal issues you’ll be hearing about more in the months ahead. Fracking, which involves extracting gas from shale rock, raises contractual issues: do the rights to the gas leases convey with the property in a sale? The answer is, it depends on what you negotiate. So, agents need to be up on the contractual issues that Fracking raise and also has to be able to manage buyers’ and sellers’ expectations about who gets the rights to the gas.

Our goal is to make you aware of these twists so you can have a better idea of what to do if you find yourself dealing with one of the issues this year.  Please call Terry Robinson & The Early-Group @303.748.3838 for more info.

by Robert Freedman

Home Improvement Projects Every Seller Should Consider

Home Improvement Projects Every Seller Should Consider.

Even in a housing market where inventory is low, some buyers may still want a move-in ready house and are willing to pay more for one that’s turn-key.

Sellers can increase their listing price and decrease the time their home sits on the market just by doing a few home improvement project. But not all projects carry the same return.

A big mistake a lot of home sellers make is they upgrade the kitchen thinking they will make so much more money on the house, but the rest of the house still needs upgrading or repairs. Home sellers have to look at repairs as a whole rather than a sum of parts.

For a kitchen renovation, the return on the investment is typically 78%, which may not make financial sense for all home owners. However, if other improvements and upgrades are made, the seller is more likely to recoup the money spent, and then some.

The home improvement priority list depends on the seller’s time frame. For those looking to list in the next couple of months, they can take on bigger projects than those looking to sell in a few weeks. However, every seller can increase the interest and price tag of their home by investing in increasing the curb appeal.

Buying a house or selling might be kind of like dating.  A pretty face may get them in the door.  Since a buyer may make a decision about a home without stepping out of the car, real estate experts say the front of the home has to be pristine, the door(s) painted and the windows cleaned.  But it shouldn’t stop there.  Sellers shouldn’t overlook the garage. Have the floors painted with garage floor epoxy. It’s amazing how many people comment on a clean crisp garage with a painted floor.

Also, by removing the window screen and cleaning the frames can also boost curb appeal. Most window screens darken a home and trap dirt. Removing them and cleaning all windows before the home has been photographed will give it a much brighter appearance, inside and out.

Inside the home, there are numerous improvement projects of varying price tags that can speed up the selling process.

Painting is a low cost way to make a home look more fresh and clean and show an owner’s commitment to maintenance. However, choose the paint carefully. Red walls or wildly-patterned wall paper can limit the appeal of a home as buyers are more drawn to neutral wall colors.

Paint freshens everything up and provides a clean and crisp feel.   If you aren’t an interior designer by trade, this is not the time to play designer. Find a reputable designer and pay them a consulting fee to pick your colors.

Other low cost improvements include de-cluttering the home, getting rid of old fixtures, particularly if they are brass, and ridding the home of personal artifacts and pictures.  You want to create the feeling of stepping into a hotel.  It should be nice and appealing for everyone.

For home owners who have the time and the budget, remodeling the kitchen and baths will go a long way in boosting the list price. But sellers have to know their market before they start making the upgrades. Sellers living in an area where granite counter tops are the norm, they better follow suit. If laminate countertops are more commonplace, then it doesn’t make sense to pay for the more expensive materials.

Another more costly upgrade that is sure to get more bang for the buck is upgrading kitchen appliances.  Appliances that bling, bring the cash.  Every home buyer at every price range wants new or updated appliances….. no one wants old and outdated appliances.  Call Terry Robinson & the Early-Group for more ideas to get your home sold fast!  303.748.3838.

7 Tips To Make Your Living Room More Appealing To Home Buyers

7 Tips To Make Your Living Room More Appealing To Home Buyers. Everyone knows that first impressions are important.  By carefully staging your home, you can positively influence the feelings your potential buyers have when they are viewing the property.

Staging is the art of decorating and arranging the spaces within your house to make it more appealing to buyers. If you can adapt the rooms to create an attractive and welcoming zone that home buyers can see themselves in, they will be more likely to buy your property.

One of the most important rooms to stage is the living room, because it is such a central part of the house. This is where a lot of the social activity occurs, so it should appear comfortable and welcoming.  Here are some tips to keep in mind when staging your living room before the next showing of your home:

  • Clear out the clutter. The most important step is to de-clutter, because a mess will turn off potential buyers. Clear away any papers, toys and other items to make your living room as clean and minimalist as possible.
  • Go zen. The main purpose of a living room is for relaxation, so make the space look as comfortable as possible. Try a soft throw on the sofa, plush cushions and a big chair that is just begging you to come curl up with a book.
  • Strategically place furniture. Arrange the living room furniture to create areas of conversation, such as two sofas facing each other with a low coffee table in the middle.
  • Depersonalize. Remove your personal items. If you have too many family photos and personal effects in the room, it can make it difficult for your potential buyers to imagine their own family living there.
  • Remove the bulk. If your living room feels small, you can remove some of the furniture to give it the illusion of being bigger.
  • Channel your green thumb. You might want to consider bringing in some plants to make the space feel fresh.
  • Brighten it up. If your living room has dark corners, invest in upright lamps that will help illuminate the space and provide an aura of intimacy.

With these seven tips, the living room in your  Colorado home will be much more appealing to potential buyers.

If you are ready to make a move to your next home, call your trusted Real Estate Agents at the Earl-Group  for a personal consultation to get the best bang for your buck!  303.816.7516


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