South Jersey Real Estate Blog

Revised Home Buyer Tax Credit

This past Friday the stimulus package was finally approved and it included revisions to the existing first time home buyers tax credit.

From the National Association of Realtors: The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.  The credit does not require repayment.  Most of the mechanics of the credit will be the same as under the 2008 rules:  the credit will be claimed on a tax return to reduce the purchaser's income tax liability.  If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

The following chart shows what has changed from the previous tax credit -

FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
February 2009

FEATURE	CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008	REVISED CREDIT – EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
Amount of Credit	Lesser of 10 percent of cost of home or $7500	Maximum credit amount increased to $8000
Eligible Property	Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.	No change All principal residences eligible.
Refundable	Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.	No change Purchasers will continue to receive refund for unused amount when tax return is filed.
Income Limit	Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).	No change Same income limits continue to apply.
First-time Homebuyer Only	Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.	No change Still available for first-time purchasers only. Three-year rule continues to apply.
Revenue Bond Financing	No credit allowed if home financed with state/local bond funding.	Purchasers who utilize revenue bond financing can use credit.
Repayment	Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.	No repayment for purchases on or after January 1, 2009 and before December 1, 2009
Recapture	If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.	If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
Termination	July 1, 2009 (But note program changes for 2009)	December 1, 2009
Effective Date	Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year.	All revisions are effective as of January 1, 2009

Important Real Estate Documents to Keep in a Safe Place

photo credit

 

Buying and selling a home generates a lot of documents…no question about it!  When you walk away from the table, you generally have a binder full of documents from activities leading up to and including the day of sale.  Which ones should you keep?  As long as you own your home, here is a list of important real estate documents you’ll want to keep in a safe place:

 

1. Property deed: keep it for as long as you own the property.  
2. Closing statements: keep statements for three years after your purchase to show capital gains.  
3. Home improvement: some remodeling projects can reduce a potential capital gains hit when you sell your property, so save your receipts and consult your accountant.  
4. Warranty information: keep until the warranty expires.  
5. Loan papers: keep until paid off or refinanced, or in the case of mortgages that have tax-deductible interest, keep them for three years.  
6. Insurance policies: keep until the policy expires.  
7. Receipts or statements: save credit card receipts and/or checking account statements or cancelled checks for all major purchases such as appliances, furniture, antiques and art  

When you sell your home, you’ll usually be required to submit a disclosure form. Receipts for major home improvements like a new roof or remodeling project can help you complete disclosure forms and substantiate the good condition of your home.

 

A bank safety deposit box or fireproof safe is the best place to store your important documents. Be sure to save an up-to-date household inventory, complete with appraisals, receipts and photos or a videotape for insurance purposes in case of loss.

 

Please call or send us an email if you have questions about the real estate process.  We’d be happy to discuss with you!

 

 

 

 

Moving? Should you do it yourself?

photo credit: johnandketurah

 

If you’re thinking about moving, one of the decisions you’ll need to make is whether you want to pack and move your possessions yourself or hire professional movers to do it for you.

 

Start by asking yourself some important questions:

• Do you have friends who are willing and able to help you move?
• Do you have access to a vehicle that can accommodate furniture and bulky items?
• Do you have the time?
• Do you have the needed strength and stamina?

 

If you answered ‘no’ to any of these questions, you should probably consider hiring movers to do the job for you. If your answers are all ‘yes’ then moving yourself can be a cost-saving option.

 

Any friends you enlist should be strong enough to help with heavy loads like couches and beds while taking care with precious heirlooms and breakables. To avoid burning them out with multiple trips consider renting a truck large enough to handle everything in one trip.

 

Alternatively, you might want to hire help just to load and unload. Hired ‘muscle’ will carry the belongings you packed to the truck and then from the truck to your new house. All you have to do is pack, drive the truck, and unpack after everything has been put in your new home.  Keep in mind that with many moving companies, they must pack your belongings for you to keep the insurance valid. 

 

Questions?  Please call or send us an email for a list of movers or other moving resources.

Selling A Home In Today's Market

The following is a press release from the NJAR:

THE REALITIES OF SELLING A HOME IN TODAY'S MARKET

(Edison, NJ) Preparing a home for sale in today's market often requires more than just few cosmetic improvements - it requires keeping an open mind about what buyers are looking for, and staying up to date on the local housing market. Homeowners can change the way buyers view a property inside and out with some updated staging and marketing techniques, and should be open to their REALTORS^®' more realistic suggestions for pricing.

"Buyers are benefiting from being able to pick and choose from a wide variety of homes on the market. They are going to be more thorough with their searches and sellers should be prepared for that," said 2009 New Jersey Association of REALTORS^® (NJAR^®) President, Diane Dilzell. "In today's market, buyers can get a great house at a great price so it's important that sellers differentiate themselves from competing properties."

Setting a realistic price.

When it comes to selling a home, it's important to keep in mind that value depends on what the buyer is willing to pay for your property and many factors contribute to their perceptions. Prices depend on local characteristics such as job opportunities, housing supply, school systems and more. Sellers should stay realistic and set the price with a REALTOR^® who can help determine which factors are at work in a given marketplace. Also, the time the owner "must" sell or the amount of repairs the home needs can play a large role in setting a fair price.

"Sellers should be pricing to stay ahead of the market and can't afford to rely on what the home was valued at several months ago," added Dilzell.

"Our REALTOR^® had a full understanding of today's market and how people are shopping, and had sound reasoning for why the price we sold our home for would be beneficial, when I originally thought it was worth more. We had unbelievable traffic flow, several return viewings, and accepted a price we were comfortable with in 26 days," said Mary Lee Hesselgrave, who sold her home in Hardyston this summer.

Get creative when marketing your home.

The marketing of homes has shifted more towards new technology, rather than only putting an ad in the local newspaper. Sellers should be open to innovative and creative marketing techniques recommended by their REALTOR^®. By considering virtual home tours and concentrating on well-lit, high quality digital photos for website listings can give your home a chance to be noticed in front of the increasing majority of buyers who turn to Internet listings first. Ask your REALTOR^® about other ways to increase awareness about your home in places where buyers will notice.

Staging helps edge out competition.

Buyers seek the least expensive home in the best neighborhood they can afford. The goal in staging a home is to maximize space and provide a clean slate for prospective buyers to make the home their own. Cosmetic improvements such as paint, wallpaper, and landscaping, are good investments to make a home generally more appealing. Mechanical repairs done to ensure that all systems and appliances are in good working condition are required to get a top price. REALTORS^®, who see numerous homes, can provide suggestions that are consistent with local market trends. Simple tips such as storing away family photos or personalized decor, maximizing counter space and clearing items away from windows can be done in just a few days. Home staging professionals can even be enlisted to help get creative with renovations and changes.

"We took our personal items, put them in storage and completely staged the house," said Cindy Sauber, who sold her home in West Windsor. "If we were going to sell, we knew we had to follow certain rules," she said.

Stimulate buyer curiosity with curb appeal.

Putting work into the inside of a home is of no use if prospective buyers don't want to enter it. Curb appeal is the first chance to make a good impression. Curb appeal sells 49 percent of all houses, whether you have a townhouse, condo or detached home, according to the National Association of REALTORS^®. Replacing light fixtures, removing dead leaves and ensuring snow is shoveled neatly from walkways and driveways are easy tasks that help entice a buyer into the home during the winter months. If a seller is unsure of what buyers are looking for, asking friends and neighbors for a fresh perspective can help them evaluate what looks old or run-down. Owners can get a "big picture" view by taking a photo from across the street.

Getting your house ready to sell...

Getting your house ready to sell can seem overwhelming, but it doesn't have to be.  Just keep in mind that you're wanting potential buyers to be able to see their own family and possessions in your home. 

In order to do that, your home must have more "blank areas" than usual to allow buyers to imagine their things in your space.  Since you're going to be packing for your move anyway, go ahead and get a start on it now.  Box up out of season clothes to make closets seem more spacious.  Remove family photos so buyers don't feel the house is already "taken".  Give them opportunities to visually place their possessions by having less of your own spread around the house.  Allow your house to still feel comfortable, but never crowded or cluttered. 

Please hit play on the video below for more tips... 

 

Brochure Box: Do You Have One?

If you're an agent, do you use one?  If you're selling your home, do you want one?  If the answer is no, I'm curious - why not?  I use them on all homes that I am marketing for sale.

What am I talking about?  I'm talking about a brochure box (information box) out in front of the home right by the For Sale sign.  Usually mine are a one page full color flyer with a few pictures of the home.  Also included is the price, address, some highlights of the home, and a web page address to get more information and pictures.  If someone is driving by and has an interest in the home, they can pull over, grab a flyer and take it with them.  It'll have all the important information for them to investigate further, discuss with family members and hopefully make an appointment. 

If there is no box, what then?  Maybe they have a pen and paper to write the phone number down.  Maybe they'll try to look it up on the internet later.  Maybe they'll forget all about the house! 

Why not make it as easy as possible for a potential buyer to get the information, when they want the information?  While this seems logical to me...apparently I'm in the minority.  If you drive around town at the numerous homes for sale, how many actually have brochure boxes?  Not as many as I thought there should be.   

 

How many days on the market?

photo credit: CraftyGoat

Days on Market (DOM) has been a statistic in much debate lately in the real estate world.  Potential buyers almost always ask "how long has this home been on the market?"  The assumption (real or perceived) is that if a home is on the market longer, the seller may be more eager to sell and willing to negotiate more. 

The Problem

The problem has been that Days on Market was not always an accurate statistic.  DOM is calculated how long the home has been in the MLS under the current MLS number.  So if the home was taken off the market and then relisted, the count started all over again at 1 day.  Even if the home was relisted with the same agent, the count started over.  This would force a buyers agent to manually look up the history of a property to determine how long the home was really on the market. 

The Solution

As a result, TrendMLS has introduced a new statistic to end the confusion.   Property Marketing Period(PMP) is now available on all reports printed out of the MLS.  This statistic tells you exactly how long a home has been marketed, regardless if it's been relisted or not.  As described by Trend - "PMP is calculated differently than DOM. For example, MLS #1234567 is listed for 10 days, withdrawn for 5 days then put back on the market as MLS #7654321 for 10 days before selling. The PMP is 20 days, while the DOM is 10 days for each MLS number. The difference is that the PMP counts the days from both MLS numbers."   So as long as the home is relisted within 30 days of coming off the market, this statistic will kick in!

So next time you ask "how long has this home been on the market" - make sure your agent provides the Property Marketing Period

What's Missing From This Picture

If you're trying to sell your home, please don't let this happen to you...

(I've blanked out the agent info)

I drive past this home about every other day and I can tell you that this sign has been like this for awhile now.  So it's not like it happened overnight.

So what does this tell a prospective buyer driving by?

1. The house is probably vacant
2. The listing agent hasn't been anywhere near this house in awhile
3. Must really not be that nice of a house
4. Not even sure what brokerage has the listing so can't call office to get more info
5. Hmmm...that other house down the street looks much better

By the way - I checked the MLS and there are no pictures shown for this home either!
If you're going to hire an agent to help sell your house, I hope you have better luck then this family

 

National vs. Local Market Stats: It's not all gloom and doom

Yesterday the National Association of Realtors released second quarter market statistics and of course the media jumped all over it touting more gloom and doom.  But is it really that bad? 

CnnMoney.com had this to say (note the usage of the words steep and plunged):  "Real estate prices continued to post steep year-over-year declines during the three months ended June 30, according to a new report from the National Association of Realtors (NAR).

Nationwide, the median existing single family home price plunged 7.6% to $206,500 in the second quarter, down from $223,500 in the same period of 2007"

They then go on to focus on all the areas that had the biggest drops.  Where is the good news?  They didn't mention any. 

What they failed to mention was that existing-home sales rose from the first quarter in 13 states.  Also In the second quarter, 35 out of 150 metropolitan statistical areas showed gains in median existing single-family home prices from the second quarter of last year, while 115 had price declines.  No it's not great news, but it's not all gloom and doom out there!

How do we compare locally to the plunging 7.6% median price?  Like always, we do much better.  Again it's not great news, but it's not all bad either.  From the Prudential Fox & Roach, HomeEpert Market Report - in the five-county Southern New Jersey area we only saw a 2.2% decrease in median price to $225,000, down from $230,000.  Comparing to the first quarter of 2008, this is actually an increase from $212,700.

So remember, when you hear market information in the media, you need to get past the sensationalized headlines and get to the real data.  Traditionally, Southern New Jersey is ahead of the pack as this continues to be a desirable place to live along with thriving businesses like Lockheed Martin, PHH, Virtua and many more!     

Is newspaper advertising dead?

With the explosion of real estate related sites on the internet, it has become easier and easier for potential home buyers to find information about homes for sale.  While reports differ on the percentage, almost all of them say that over 80% of home buyers start their search on the internet.

With information so easily accessible online, do people still read the Sunday Real Estate section of the newspaper to find out what is for sale?  Does it make sense for agents to keep spending money placing ads if no one is reading?  I know many agents, myself included, have scaled back our newspaper budgets and shifted more resources into online advertising.  As this happens, will newspapers find a need to have a Real Estate section?

  

Well, the LA Times found a need for change.  It was announced that this past weekend was the last run for the LA Times Real Estate section.  That's it, no more.  They will fold real estate related news in the Business section and continue detailed coverage online.   

So, who will be next?