Tag Archives: Selling a home

Looking to sell a home in Austin? Doreen Zelma is a real estate professional ready to help. Doreen is a seasoned listing agent and offers only best marketing in Austin.

Spring into Listing, the Selling Season has Begun

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I’ve been flooded with questions lately by both Buyers and Sellers, and I love questions, because it means you are thinking.  I would like to take a minute to share what some of my clients have been thinking about, since you might have the same questions racing through your head as well.

 

For Sellers, the questions I am getting are more like, “do I put on a deck?”, “do I power wash the house?”, “do I install a new kitchen?”.  My universal response to most of these questions is, don’t.  Don’t do anything you would not have done, if you weren’t moving.  The reason is more about the cost of time, because time can cost more than you will ever get back.  We are entering the selling season.  

 

A deck is not going to necessarily bring you more money.  If the deck takes twice as long as it was intended, you have not only spent money on something that wasn’t necessary, but you have missed the Spring buying season as well.  

 

Power washing your home, could result in your house needing a new paint job.  Do you have time for that?  Do you have the money?  Using a garden hose, might easily do the trick, without creating a problem you didn’t have.  

 

Installing a new kitchen?  Out of all the questions I have received this week, this is the one that would add the most appeal to your home, and will bring you the most return on the cost, but kitchens take time.  If the kitchen costs $25,000, and isn’t going to be done for 9 weeks, we have lost the Spring buying season.  That $25,000 remodel, may only net you $15,000 in the fall.  When interest rates go up, house prices generally go down because people have less buying power.  

 

The #1 thing I want people to do when I list a house is clean.  When Buyers see a 1970’s kitchen that is spotless, they comment on how clean it is.  It’s a blank canvas that can updated someday and is considered usable the way it is.  When the same Buyers see a modern kitchen, that is dirty, it is a turn off.  It’s funny how the brain works, it doesn’t say “I can clean this”, like you would think; instead it says “I could never cook in here”.  If you don’t like to clean, hire someone.  It’s money well spent and I guarantee you will get 100% return on your cost, instead of a remodel that will cost you to miss the Spring season.  Do those remodeling projects in the fall, six months before you are planning to sell.

Tax Credit 411 – April 30th deadline

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First Time Homebuyer Tax Credit Extended Into 2010!
Plus…A New Tax Credit for Certain Existing Home Owners!
It’s official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

•You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
•You do not use the home as your principal residence.
•You sell your home before the end of the year.
•You are a nonresident alien.
•You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
•Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
•You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.
Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit.

The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

Pets

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One of the most important things I tell students is the importance of listening to clients. Most people think listening comes naturally, and yet it is amazing what is missed when we are not paying attention.My Tarrytown clients have 2 cats, which was a concern when it came to allowing agents to show their home. I listened and having pets of my own, certainly understood their concern, so I offered a few different options on what to do. Pets often bring an interesting challenge. Dogs get excited and generally need to go outside when they have guests. Cats run for cover or want to give you a tour. Unfortunately, some people are afraid of dogs, and others have pet allergies, so they really don’t want Garfield rubbing on their pant leg.

Remember, moving can be a stressful time for your pets, as well. Strangers in their ‘dens’ can be quite unsettling. The best thing to do find a safe place for your furry friends to go whether it is family, doggy day care or even a crate in the garage. The goal is to keep them calm and secure, because if you have one, you know…they can be spiteful little creatures.

Ode to the Texas Fireplace

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Did you ever notice its rarely the biggest things in life that give us the greatest chuckle?  Often, it’s the little things that go unnoticed, until were stumble on them accidentally.  I had one of those moments, when I sold yet another home with a unused fireplace.

Oh yeah.  Did you know Texans love their fireplaces?  It brings some monetary data points to a home, but the intrinsic appeal is huge.  It is often a must-have item for my buyers.  Yes, I can actually make a fireplace, criteria on a search.  What I find so amusing though, is the lack of use these must-have items receive. A fireplace is the only house hold ‘accessory’ I can think of, that is often never used.

I guess its presence brings about an option for use, which simply might be missed without it.  Sure, Santa will use it, even if no one else does.  It’s just symbolic for me of that childhood must-have toy, but once you got – you never played with it.  So, go on Texans – light those fireplaces!  At least, when you fill out those Seller’s Disclosure Notices – you will know if they work!

How to Sell It

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I have spent some time in Western Austin.  From West Lake Hills, all the way up to Milwood.  I have to say overall, I am a little disappointed some listing agents and owners aren’t preparing a home as well as they could for sale.  Basic things like replacing the carpeting, touching up nail holes….how about vacuuming?  When you sell your home, it should shine.  If ’shine’ is too much to ask for…how about clean enough for company.  You are going to have company when selling your home. I am calling them company, but they also happen to be your harshest critics.

My top 2 goals as a listing agent, are to sell your home in the shortest amount of time, for the most money possible.  When I’m listing a home, I don’t really care how many homes are on the market.  I just want my listing to shine, so it’s the next one to sell.

Now, I’m not telling you to install $30,000 in granite.  All I am saying is make that Formica the best it can be!

Resale vs. New Construction

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I taught the Buyer Consultation class to new agents this week. When you are buying a home, especially in an area where there is still building going on, you need to be mindful of its resale potential. If you are planning on selling in less than 3 years, you may very well be competing against new construction.

One year young – is not new. You will not be able to price your home equal to a new build, if all other things, like lot location, are equal. This is why certain areas have excess inventory right now. The Resale market is slower in price points in areas where new construction going on. Why buy used, when you can buy new? If your home is listed for resale in these areas, you need to be competitively priced. Its like picking a car off the lot, instead of ordering one.

I always say money has a way of making things disappear. So, maybe you can’t ‘pick your colors’ as with new construction, but if a buyer can save some money on your resale…you may be able to make that existing paint color vanish.

I support local Austin, after all I think its only neighborly.

From the Hill Country to Downtown 360 Condominiums

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I went down to Dripping Springs to tour some homes in the $400’s and went further North to Westlake to see at newly built home for $1.3 million, which does come with boat dock rights. In between Dripping and Westlake, was a stop Downtown to the 360 Condominiums

It’s always interesting for me to tour a development after I have seen models and artist renditions of what’s to come. I have to say 360 delivers and then some. From the pool, to the club room, to the theater room (just bring your DVD) – the building’s amenities and units are impressive.

Prices vary with floor levels and finish outs. If you know anyone who is interested, please have them call me.