Tax Break Tips For Home Owners

Before we know it  April 15th will be here and our taxes will be due.  If you are a home owner you may be eligible for some additional tax breaks that you aren’t aware of.

Before you meet with your accountant review this list to see below to see which itemized deductions you qualify for. Then bring any pertinent information to your appointment.

Tax Break Tip #1 Interested Paid At Closing
On your closing statement there is typically a line called “home mortgage interest”. If you purchased a new home for less than 1 million dollars, you can add the interest you paid to your itemized deductions. This would be included on a Form 1040, Schedule A.

Tax Break Tip #2 Property Taxes
The key here is that the property taxes you are paying are for the true assessed value of your property. If that is that case you are able to deduct state and local property taxes. The exception is if you have money that is still in escrow that is reserved for property taxes.

Tax Break Tip #3 Home Office
As more and more of us are working from home, we are now able to file for deductions for our home office of our small business. The key here is to have an official space within your home that is used exclusively as your place of business. If you meet these requirements you can deduct office supplies, repairs, upgrades, insurance, and depreciation.

Tax Break Tip #4 Fees For Points
If you paid points when you obtained your mortgage, you can deduct the fees. You just have to make sure that all of the fees are associated with your purchase. If you refinanced your mortgage you should talk with your accountant about the fees for points that qualify as a deduction. The deduction is a bit different with a refinance as the points must be deduced over the term of your new mortgage.

Tax Break Tip #5 Sales Expenses
As we all know there are always investments that need to be made prior to selling your home. You can include any costs, fees, and repairs associated to the sale of your home that you incurred within 90 days of your sale. This includes title insurance, broker’s fees, staging expenses, and advertising expenses.

Tax Break Tip #6 Interest on Home Improvement Loans
If you took out a loan for “capital improvements” on your home you are able to claim this deduction. Capital improvements include and improvements that add value to your home such as adding an extra room or new plumbing. Things like painting, changing carpet, and redecorating are not qualifying deductibles.

Tax Break Tip #7 Interest on Construction Loans
This deduction is only applicable if you take out a construction loan on your primary place of residence or second home. This deduction will only cover the first year of your loan, even if the construction project extends beyond one year.

Tax Break Tip #8 Home Insurance Premiums
This potential deduction is one you will want to bring to bring to your accountants attention as the qualifying terms are a bit tricky. You may qualify to deduct your premiums for your primary residence and second home, if your income falls within certain parameters. Check with your accountant to see if you qualify.

As tax laws and criteria to qualifying for deductions are in constant flux, check with your accountant to ensure you are maximizing your deductions.

Real Estate is a Service Business and Service Matters

Today’s high-tech world has us all juggling multiple means of communication—cell phone, work phone, voicemail, email, text, IM, BBM, and social media.  

There are so many ways to communicate and the internet has made us so easily accessible that the sheer volume of incomingcommunication can be overwhelming. When we get overwhelmed customer service can easily get lost in the shuffle.

Many of us don’t work from an office full-time and have to respond to our clients while on the go.  Even with all of the demands on our time we have to make sure that we hear our customers needs.  It is beyond just listening, we must listen with the intent to learn something and not with the intent to simply check one more response off or our “To Do” list.

You could be providing the best services or product available, but if your customer service is lacking your clients will go elsewhere.  

Your clients can sense when your response is rushed,sloppy, or a canned.  Focus more attention on giving your clients, collegues, family, and friends a personalized response.  

Whether personal or professional, listening to learn will extend the longevity and quality of your relationships.

Home Fashions Come, and Home Fashions Go

Ever-changing Interior Design Trends

Interior design trends are similar to clothing trends.  One day a 1930’s dress is vintage the next day it’s a “modern take on a classic style”.  Interior design trends are the same—everything old is new again, and soon the new will become old.

Take a look back at the decorative changes you’ve made over the last decade or so.  When you painted your dining room and got a new dining room set  your previous set was probably in great condition, but the room was no longer on trend.  It was time for the Victorian to be replaced with Contemporary.

I remember my mom’s great excitement over her beach themed seafoam green bathroom with shell motif.  At the time it was the envy of all her friends. Now I just can’t imagine such a thing when not at an actual beach—and even then I’m not so sure anymore!  

The popularity of home improvement and home interior TV and magazines has peaked our creativity and challenges us to stay on trend when it comes to interior design.  Interior design trends have one constant, they will change and evolve and we will continue to update our homes as they come and go.

The Concept of Time in Real Estate

Buyers and sellers always ask me questions about time.

How long will it take to sell my house?

How long will it take the seller to respond to my offer?

How long will it take to find the right home?

None of these questions have answers.

We can make an educated guess as to how long it will take to sell a home based on market conditions and price.

We can not predict how long it will take a seller to respond to an offer.  In general they should respond quickly but there are obstacles like jobs and illnesses that slow the process down.  Sellers usually respond more quickly to really great offers than to offers they don’t like.

As a real estate agent practicing business in a crazy market like Los Angeles,  I like to let my clients know what to expect, and they need to know they can expect most anything.  We can never predict what another person will do, we just know what they are supposed to do.  Remember, I am a facilitator of your real estate transaction, but you are and always will be the decision maker.  It is my job to educate you and give you guidance based on my experience, but you make all of the decisions.

There are many reasons for being slow to respond to an offer or a counter offer but there is no good reason for not communicating to other agents or to clients if only to say this is going to take awhile, yet often people will not take the time to communicate this, instead the avoid the situation or the client.  Is that the type of real estate agent you want to hire?

Adding a Guest House – the Single Best Improvement you can Make to your Property

What is the best improvement you can do to your home to increase the value? Add an in-ground pool? A hot tub? New windows and siding? Nope, none of these.

The single best improvement you can make to your home and land is to build a new house – a guest house.

The economy has been limping along for a while. Because of economic difficulties or choice, family members are living together longer. Grandparents are living with their adult children. Children are staying with parents through college and longer.

Even for those who are doing well, having a separate house for a nanny can make the job much nicer for the nanny and the family.

The best part of a guest house is that it adds value without having to make your existing home a lot larger and it’s a lot cheaper to do. Because a guest house would has its own bathroom, bedroom and kitchen, anyone living there can live a completely independent life.

Perfect for every need

For aging parents, this can mean years of complete freedom while still being close enough for family to help when it is needed. An elderly mother or father can live in one of these small houses easily. Since there is generally not a lot of square footage, the house is easy to clean and maintain. Generally all one floor, there are no stairs to negotiate, eliminating some of the worries of falling down.

Adult children are finding it harder and harder to get a start in the current economy. Jobs are harder to find and housing, especially without a lot of credit history, can be very difficult to afford. A guest house can give them the freedom they deserve while allowing them to still live at home. Because they are in a completely separate house they have all the privacy an adult needs, without the expense and hassle of moving away completely.

Nannies and servants will feel more comfortable having a private space that they can retire to at the end of the day. Not needing to be in the main house means that they can feel like their work day is actually ending, as opposed to being just down the hall from the children or family that they work for. You will be much more likely to get a higher quality of domestic help if they have their own space to live in.

Maybe you just need a place for family to stay when they visit, or a home office away from the kids and the bustling house? After all, that was the original function of the guest house, wasn’t it?

Increase your property value

Property value is almost guaranteed to increase substantially. Because family situations and living arrangements have changed so much of the past few years, there are hundreds of thousands of people in need of guest houses looking at real estate every day.

If you find yourself selling your property, you will be able to accommodate those people who are coming onto the market with the need for a guest house. These buyers won’t need to worry about having to live together in the main house while they build a separate house.

Putting up a guest house

There is a couple of ways to get the new house onto the property:

First, of course, you can build it right on site from scratch. There are all kinds of floor plans available on line for free or nearly free. Since they are one story houses and not very complex, it’s very easy to find plans that are suitable.

The second way to put a guest house on your property is to purchase a prefabricated house and have it delivered to you. There are several companies right in California. These pre-fab homes are great quality and some of them cost less than the price of decent new car.

Getting Your Home Organized and Ready to Sell

I know, de-cluttering and getting organized seems to be quite a large project, especially when you’re in the middle to list and sell your home.. The trick is to break it down into several smaller tasks. For example, when you are preparing to sell your house, it is crucial for you to organize each room. This sounds as though it is a huge daunting project. To begin such a large task, focus on de-cluttering and organizing each room, one at a time. If focusing on the entire room is too large of a project for you, break the room down into smaller tasks. Could you handle starting with the bedroom closet, and then possibly moving on to the, say, the dresser? Getting the work done in small sections is still better than not accomplishing anything at all. 

But before you can break the project into different sections, you must first decide where to start. When trying to decide where to being, it may feel impossible. Take a look at the below four steps, and you will be set to start wherever you feel best.

Pull it all out.  Regardless of whether you are keeping the item, donating it, or tossing in the garbage, remove it from the area you are organizing.

After every item is removed from the space you are working on, it is time to move furniture, and other large objects into their final positions, or as close to their final positions as you can get. Remember, you can always re-arrange things later on if needed.

Clean, clean, cleanWhile you have everything out of the room, or space, clean it thoroughly. Having everything our out of the way gives you the chance to find dust bunnies, and other dirt and debris that you would normally not see, or be able to access easily.

Do the same for each and every item you bring back into the space. After all, who wants dirt and dust particles flying around on a freshly cleaned bookshelf, especially when it’s due to the book not being wiped down.

Sort your itemsThis step is commonly seen on the popular television show The Clean House. When removing items from the space, sort them into several piles:

• Keep: This pile is for the things you are going to put back
• Donate/Sell: This pile is for the items that are still in good shape, but are not being used.
• Reuse: This pile takes items that were cluttering one room, and uses it for a different purpose in another room.
• Recycle: This pile is used for items that you are getting rid of that can be recycled. For example, if you come across a large stack of old paper that you do not need and are going to toss, throw it in the recycle pile
• Toss: These items simply need to be thrown in the trash.

Remember, you want to keep the area organized and neat. Be sure that everything has it’s own place, and does not begin to clutter the area you are working to neatly organize.  You want to get top dollar for your home, don’t you?  To do so, a potential buyer needs to be able to see your HOME, not just your “stuff”.