Information, Insight, Advice.

House Ok's Short Sale Tax Break, On To Senate

The U.S. House passed a bill last week that would extend key tax breaks to financially distressed home owners who went through a short sale. The bill now goes before the Senate for consideration, where housing analysts hope for action during the final week of the Lame Duck session of Congress.

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The National Association of REALTORS® has been calling on members to urge Congress to renew the Mortgage Debt Forgiveness Act, an income exemption on mortgage debt forgiven in a short sale or a workout for principal residences.

The act expired at the end of 2013. That means distressed home owners could be responsible for paying pay taxes on “phantom income” from any forgiven debt once the properties are sold. That is, if a lender sells a property for less than the amount owed on the mortgage, the home owner will then have to report that forgiven debt as taxable income to the IRS. The tax on a 2014 short sale or workout would be due April 15 of next year if Congress fails to extend the measure. If the Mortgage Debt Forgiveness Act extension is granted, taxpayers will be able to continue to exclude the forgiven debt from their annual income calculations.

The House included a one-year extension of the Mortgage Debt Forgiveness Act in the Tax Increase Prevention Act of 2014, which passed the House on Wednesday in a vote of 378-46.

In the first three quarters of this year alone, there have been more than 170,000 short sales, representing a total bill of $8.1 billion in mortgage debt forgiveness, according to estimates from RealtyTrac. But the lapse in the extension has caused some home owners to avoid short sales and workouts. Still, more than 5 million home owners remain underwater, owing more on their mortgage than their home is currently worth. Also, nearly 1 million households are seriously delinquent on their mortgages or are in foreclosure.

“Unless Congress acts, hundreds of thousands of American families who did the right thing will have to pay tax on ‘phantom income’ – money they never see,” read an ad issued by NAR last week that ran in select Capitol Hill publications.

Source: “Short Sale Tax Break Passes House," HousingWire (Dec. 5, 2014)

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6 Pricing Mistakes Every Seller Can Avoid

           

If you’re getting ready to sell your home, you want to get the most money for your investment, right? One of the key factors that will sell your home is price, and having a sound pricing strategy is a must if you want to find the right buyer.

Here are six common pricing mistakes all sellers should avoid.

1. Overpricing from the start – You might think your home is the best on the block and should command a price relative to the value you see. Wrong. You have to appeal to the value homebuyers see. Overpricing your home at the onset could leave out strong potential buyers, especially if recent sales and other factors in your neighborhood don’t justify your listing price. You also run the risk of needing multiple price reductions, which keep your home on the market that much longer.

2. Leaving out potential buyers in online searches – Entering a price range is the first search parameter most homebuyers use to narrow down their options. If a buyer’s price range is, say, $250,000 to $300,000, they won’t see your home if it’s listed at $305,000. It might make sense to list it right at $300,000 so that you capture potential buyers in the ranges above and below. Ultimately, this is up to you and your agent, but the range your home's price falls into is certainly worth thinking about – especially if you're teetering between price ranges anyway.

3. Not considering recently sold properties – To arrive at a listing price that will generate buyer interest, you can’t base your price solely on the prices of other homes in your area that are listed for sale. You also need to consider recent sales in your neighborhood and the final sale prices. An experienced agent can provide you with information on recent sales to help you see the bigger picture.

4. Getting too creative with your asking price – Make it easy for buyers and pick round numbers. Listing a home for $512,477, for example, will give potential buyers pause about your intentions and divert attention from your property to you, as the seller. Maybe it's best to save the creative juices for the property description.

5. Not being open to negotiation – The quickest way to kill a sale is to dig in your heels on asking price before the for-sale sign even goes in the yard. Negotiation is a two-way street, and if you refuse to budge on pricing or other conditions, you might be in for very bumpy (and long) ride. Ask yourself: Is it more important to get full asking price, or can you make a few concessions to find common ground that will ensure a closed sale?

6. Ignoring your agent’s insights – The best route to the right price starts with picking a great agent and then listening to his or her advice. Your agent will look at your situation from all angles – your home's features, the local market, recent sales and more – to help you make an informed decision about pricing.  

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11 Things you can do this weekend to upgrade your bathroom for under $100

 If your bathroom is old, ugly, dirty, or disorganized, you don't have to live with it. And you don't have to overhaul it either. Small changes and small bills can help you love your bathroom again. Here are 11 ways you can make it happen.

 

1. Change your lighting or atleast the glass.

A lighting update can bring a fresh, new look to your bathroom. But if you're not an electrician or if what you want is too pricey, new glass shades can breathe new life into old fixtures. You can find a variety of styles at Home Depot and Lowes priced between $4 and $20 apiece.
2. Paint Your Cabinets.
Who says you have to stick with the medium wood grain look you were handed? Grab some sandpaper and your favorite color and transform it. If your cabinets are brown, you may want to go white for a classic look that never goes out of style. Or, adopt a trend and bring gray or blue into your cabinets for a modern touch.
3. New towels and bath mats.
It seems like an easy fix…because it is. Talk about minimum effort, maximum reward. If you can drag yourself to a Target, Macy's, Bed, Bath and Beyond, or, our favorite for items like this, Tuesday Morning, you can simply and inexpensively revamp your bathroom and give it an updated, plush feel.
4. Change your showerhead.
You can change out a showerhead for under $20, but for a bit more, you can transform your shower into a spa-like experience. The Delta In2ition has a showerhead and hand shower and is just $79.
5. New vanity
Yes, you can get a new vanity for under $100. This version from Home Depot comes in a few colors (we're partial to the white) and has an engineered composite top that resembles stone. It's a quick and easy way to modernize a powder bath. Or, bring in a pair for a smaller guest bath.
6. Organize it.
7. Tile it.
Peel and stick tile continues to be one of our favorite things. Inexpensive and easy to use, it can help you quickly and easily transform a space. If you don't have a wall suitable for tiling in the bathroom, you can bring new interest to the room by tiling around the perimeter of your bathroom mirror.
8. Paint the door.
It's often overlooked, but your bathroom door can become a focal point when painted in a bold or complementary color. Get some ideas on Houzz.
9. The Right Lighting

Experts recommend sconces at the side of a bathroom mirror instead of lighting over the mirror. It creates fewer shadows and is optimum for shaving and applying makeup. But even if the placement of your lighting isn't changeable, you can still adjust the brightness level by making sure you have the right bulbs.

"In the master or guest bathrooms, use fixtures that provides 75 to 100 watts' worth of illumination," said Forbes. "You can get these wattage equivalents in a 24- to 26-watt compact fluorescent or 20- to 25-watt LED."

 

10. Create some Ambiance.

Candles in clusters around the tub are a given. But you can create an inviting bathroom with other special touches as well.

 

11. Scrub-A-Dub

If you're not inclined to buy anything or change anything, you can still make an impact on your space. Put your gloves on, get your bleach out and clean that sucker. You'll kill off any lingering germs, and make it smell and look good.

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