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2012 Home Sales Predicted To Be The Best In 5 years By NAR

by Mark Rieger, Mark Rieger Realty

Every once in awhile I like to copy and post an article that seems to relate to our real estate market right here in Central  Oregon. The Inman News article below seems to be tracking right along with what I have been seeing here in this area. We are currently experiencing the lowest inventory levels we have seen in many years, continued low interest rates, and very strong buyer activity in most if not all of our Central Oregon communities. Good listings that are priced right usually have multiple offers on them the first few days of being on the market. Prices have been starting to inch up because of the simple supply and demand theory.

Read the article below, and let me know if you have any questions. If you have been waiting for signs that the real estate market has bottomed out in this area, you had better not wait much longer. If you need help finding a home, now is the time to Buy! I'm ready to help you if you need it. Give me a call today.

 

February pending sales up 9.2% from year ago

By Inman News
Inman News®

The National Association of REALTORS® is predicting existing-home sales will jump 7 to 10 percent in 2012 to the highest level in five years, based on an "uneven but higher sales pattern" so far this year.

Pending home sales fell a seasonally adjusted 0.5 percent from January to February, which was up 9.2 percent from the same time a year ago, NAR said today in releasing its latest Pending Home Sales Index.

Last week, NAR reported a similar trend for existing-home sales, which were down 0.9 percent from January to February, but up 8.8 percent from a year ago.

The pending sales data released today provides a glimpse into more recent trends, because it tracks homes that were under contract in February -- deals that will in most cases be finalized within one or two months.

NAR said 31 percent of REALTORS® experienced contract failures in February, in some cases because buyers' mortgage applications were rejected or because appraisals came in below the negotiated price.

In the Northeast, NAR's index slipped a seasonally adjusted 0.6 percent from January but was up 18.4 percent from a year ago.

The Midwest saw a month-over-month gain of 6.5 percent and a 19 percent gain from a year ago.

Pending home sales fell 3 percent in the South from January to February, but were up 7.8 percent from a year ago.

In the West, the index declined 2.6 percent from January to February and was 1.8 percent below the index rating in February 2011.

In its latest economic forecast, NAR predicts existing-home sales will total 4.65 million in 2012, up 9.1 percent from last year. That forecast assumes that the U.S. economy will grow at a 2.3 percent annual rate and add 2.7 million jobs this year. 

Helpful Tips To Get Your Home Ready To Sell

by Mark Rieger, Mark Rieger Realty

It's that time of year again, when I take a moment to talk to all of you who are thinking of putting your home on the market this spring. If real estate's favorite old adage is "location, location, location," then it's got to be followed closely by, "You get only one chance to make a first impression."

You can't change your home's location, but you can certainly do everything within your power to make that first impression a strong one, so let's go over the basics of that all-important must-have for a successful sale: curb appeal.

Start with a step back

You've seen the outside of your house so many times that you don't really see it anymore. So now's the time to look at it with new eyes, from the perspective of a prospective buyer. And if you can't do it objectively, get a friend, a neighbor or I can do it for you.

Put yourself in the buyer's shoes, and make a written list of those things that might raise some concerns for you if you were thinking of buying it. And while the front of the house is the primary focal point, don't overlook the sides and rear of the house as well. Here are some things to keep in mind:

Exterior paint: The color and condition of your home's exterior paint job is one of the single most important things to a prospective buyer. The color makes a visceral impact the moment a buyer walks up, and while you might have thought that the hot pink siding with neon purple trim was a great showcase of your individuality when you painted the house, it's going to severely limit the home's appeal.

And no matter what color the house is, if the paint job is faded and peeling, it's an immediate warning sign to buyers that the house hasn't been maintained, so they'll have their magnifying glass out to look for other defects.

If you're handy with a brush and an airless sprayer, you might just want to undertake a repainting project yourself. A long weekend and a few hundred dollars in paint can make a world of difference in how well the home shows and how quickly it sells.

If you don't want to paint the entire house -- or if it doesn't really need it -- just painting the trim, exterior doors, garage door or window shutters can make a big difference as well.

Roofing: A bad roof is another indicator of a general lack of maintenance, and may point a finger at potential structural and even mold problems resulting from leaks. Roofs are expensive to replace, but depending on your market and your desire to reap top dollar from the sale, you may want to take a hard look at the economics of re-roofing. Also if the buyer for your home requires financing, most lenders require the roof have a minimum of 3-5 years of life left in it.

Talk with me about the pros and cons of re-roofing now.

Driveway and walkways: Driveways are a pretty dominant feature in most homes. Clean any oil-stained concrete, and repair small cracks before they get larger. For asphalt driveways, a seal-coat can often make a big difference in appearance and help prolong the asphalt as well.

For concrete or asphalt that's badly damaged, it's time to be thinking about replacement. You can replace the driveway with the same material as before, or consider an updated look by using paving stones instead -- they hold up well in all types of weather, and can even be a very satisfying do-it-yourself project.

How about walkways? When someone arrives, is there a clear and safe path to your front door? You may not mind walking across your front lawn, but guests and prospective buyers would definitely prefer a walkway. There are lots of options for creating a new front walkway or replacing an existing one, so check out your home center or some landscaping magazines for ideas.

Landscaping: Are things overgrown? Dead or dying? Obviously neglected? Landscaping is a huge part of that first impression, so remember to take a critical look at it.

  • Fertilize and water the lawn regularly to green it up, and run an edger along sidewalks and driveway edges.
  • Rake up leaves and pine needles.
  • Repair sprinkler systems.
  • Prune back or even remove those wild shrubs, and trim overhanging tree branches.
  • Use bright flowers to create borders and accent areas that add both color and hominess to the yard.
  • Consider adding new shade trees in front, which help a home look more established and appealing. Trees look best planted in odd numbers -- a grouping of three or five for example -- and the folks at your local nursery can help you with proper spacing.

Clean and organize: Finally -- clean! If you're not going to paint, wash down the siding to remove dirt and stains and get it looking fresh and clean. Wash driveways, walkways and patios. If you have a wood deck, consider a complete cleaning to restore the wood to a fresher look.

Wash all the windows, inside and out, and wash the screens as well. Polish doorknobs and light fixtures. Stow all of your garden tools and kids' toys away to remove clutter and potential tripping hazards. Take a trip to the local landfill and dump all the stuff that's accumulated in and around the yard.

Check the night view

One last thing: Check the night view as well. A home that shows well at night really creates an impression. Replace any burned-out light bulbs, and consider adding a timer or two to keep the lights on a little longer into the evening.

Consider some low-voltage or solar lights to accent front walkways, and maybe provide up-lighting to accent trees and larger shrubbery. Keep a light or two on in the front windows as well, to add to the feeling of coziness and comfort.

Feel free to forward this on to anyone you know who is thinking about putting their home on the market. It could potentially help get their home sold faster and for the most possible money. And if you are looking to Buy or Sell a home anytime soon in the Central Oregon area, please let me know! I'm here to help.

10 Things To Know About Mortgage Debt Forgiveness

by Mark Rieger, Mark Rieger Realty

I've been asked many times over the past 4-5 years whether or not if the money a bank forgives on a persons mortgage when a short sale is completed can trigger a taxable event. Not being an attorney or a CPA, I felt like it would be a good idea to pass on the following article written by Stephen Fishman of Inman News. The article is very clear and to the point. Hopefully some of you will get the answers you've been looking for. Let me know if you have any questions.

Real Estate Tax Talk

By Stephen Fishman
Inman News®

Over the past several years, millions of homeowners have had billions of dollars in mortgage debt forgiven, either through foreclosure, refinancing or short sales. It's important for real estate professionals and homeowners to understand that mortgage debt forgiveness has significant tax consequences.

Here are 10 things the Internal Revenue Service says you should know about mortgage debt forgiveness:

1. Normally, when a lender forgives a debt -- that is, relieves the borrower from having to pay it back -- the amount of the debt is taxable income to the borrower. Thus, a homeowner who had $100,000 in mortgage debt forgiven through a short sale would have to pay income tax on that $100,000, as an example.

Fortunately, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from your taxable income up to $2 million of debt forgiven on your principal residence from 2007 through 2012. This means you don't have to pay income tax on the forgiven debt.

2. The limit is $1 million for a married person filing a separate return.

3. You may exclude from your taxable income debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

4. To qualify, the debt must have been used to Buy, build or substantially improve your principal residence and be secured by that residence.

5. The Mortgage Forgiveness Debt Relief Act applies to home improvement mortgages you take out to substantially improve your principal residence -- that is, they also qualify for the exclusion.

6. Second or third mortgages you used for purposes other than home improvement -- for example, to pay off credit card debt -- do not qualify for the exclusion.

7. If you qualify, claim the special exclusion by filling out Form 982: Reduction of Tax Attributes Due to Discharge of Indebtedness , and attach it to your federal income tax return for the tax year in which the debt was forgiven.

8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax-relief provision. In some cases, however, other tax-relief provisions -- such as bankruptcy -- may be applicable. IRS Form 982 provides more details about these provisions.

9. If your debt is reduced or eliminated, you normally will receive a year-end statement, Form 1099-C: Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

The IRS has created a highly useful Interactive Tax Assistant on its website that you can use to determine if your canceled debt is taxable. The tax assistant tool takes you through a series of questions and provides you with responses to tax law questions.

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, see IRS Publication 4681: Canceled Debts, Foreclosures, Repossessions and Abandonments. You can get it from the IRS website at irs.gov.

Home Ownership and Taxes

by Mark Rieger, Mark Rieger Realty

Tax season is upon us. Many people have questions when it comes to homeownership and the tax considerations that come with it. Your accountant can help you answer these questions, but here is some basic information about home ownership and taxes.

Property Taxes
 
Property taxes are paid by most homeowners in the US for the privilege of owning a home. On average, property taxes amount to 1.5% of the property’s current market value. Property taxes are determined by county or city authorities to help pay for public services and are calculated using a variety of formulas.
 
Property taxes are fully deductible against current income taxes.
 
Mortgage Interest Deduction
 
The mortgage interest deduction is one of the most important tax benefits homeowners have. Homeowners can deduct the interest paid on mortgage loans to help Buy, build, or improve a primary residence and/or second home.
 
The mortgage interest deduction entitles you to deduct the interest on your home loan for the year in which you paid for it. While mortgage interest reduces your taxable income, it is not a dollar-for-dollar tax cut.
 
The amount of interest on your mortgage decreases each year, so making principle reductions every year can help you pay off your loan early.
 
When buying a new home, the borrower is generally required to pay interest from the closing date until the first of the following month. Verify whether or not that charge is included in the year-end statement.
 
To use this deduction, you need to itemize, and your total deductions need to exceed the IRS’s standard deduction.
 
Capital Gains
 
When you Sell your home, you can keep, tax free, capital gains up to $500,000 for a married couple or up to $250,000 for individuals in profit from the sale. To qualify, you must have lived in the home as your primary residence for at least two of the prior five years. This is not a one-time tax exclusion. It can be used as often as you meet the qualifications. Some exceptions do apply.
 
Homeowners should always keep all receipts of permanent home improvements and information on all mortgage closing costs. If you end up in a situation where you have to pay capital gains taxes, these costs can be added to your adjusted cost basis. Cost basis is a tax term for the dollar amount assigned to a property at the time it is acquired, for the purpose of determining gain or loss when it is sold.
 
Any money spent on permanent home improvements can be added into the home’s cost basis, which reduces capital gains when the home is sold.
 
Home Acquisition Costs
 
Points paid by the purchaser or seller to Buy a home are deductible for that year. Closing costs aren’t immediately tax deductible, but they can be figured into the adjusted cost basis when you Sell your home. These fees include title insurance, loan application fees, credit report fees, appraisal fees, services fees, closing costs, document preparation costs, and recording fees.
 
If you have questions regarding home ownership and taxes, feel free to contact us. You can also contact the IRS by calling 1-800-TAX-1040.

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