Although it’s still a freezy winter month, April and tax time are on the horizon again, and there are great deductions for homeowners. So browse the possibilities, and contact your tax professional to ask if and when these deductions might apply to you. And consider using your tax refund for a cruise to warmer climates!

1. The old standards: Almost everyone knows that the mortgage interest on your home is tax-deductible.
   If you have more than one mortgage, you can still deduct the interest on all of them, as long as they don’t exceed one million dollars in total mortgage amount, and the purpose of the mortgage is to buy, build, or improve your home. (That second mortgage to finance your 10th wedding anniversary bash does NOT count!) Don’t forget, your state and local property taxes can be written off against income, but make sure you claim them in the year they were paid, not owed. Another old standard is the PMI deduction. If you bought your home after 2006, and your income is $109,999 or less, you may qualify.
2. Just purchased a home? These deductions may not be on your radar, as they aren’t the old standard. Did you know that if you just bought your home that you may be able to get a deduction for the points you paid to buy down your rate? If you bought a home, you can deduct the points for the year you refinanced. (Did the seller pay the points? Check with your tax pro, you may still qualify to deduct them!) And if you moved more than 50 miles when you bought your new home, some of your moving expenses may also be deducted.
3. Refinanced? You’ve got possibilities, too! You can’t deduct your points all at once, as it’s written off over the course of the loan, but you can deduct 1/20th of the points you paid on a 20 year loan each year over the life of the loan. Every little bit helps, and this one keeps helping for years.
4. Did you sell your home this year? Every two years, single homeowners can have a tax-exempt profit of up to $250,000, as long as they lived in the home as a primary residence during two of the last five years. Married homeowners aren’t left out, they can have up to $500,000 of tax-exempt profit on the sale of their primary residence.
5. Did you make improvements to your home this year? Keep your receipts, invoices, and records. Although the expenses can’t be deducted directly, they can help you prove your home’s worth and value when it comes time to sell…that can help you both with the selling price, and proving what was profit and what was value when it comes time to pay capital gains taxes after the sale of your home someday.
6. Did you make any improvements for a family member with a chronic illness or disability? As long as the improvements are to accommodate a medical need and don’t add to the value of your home, you can deduct them. Ramps, bathroom fixtures, changes in counter heights, and air filters are all deductible, but consult your favorite tax pro about items like pools, additions, and air conditioning.
7. Speaking of pools and air conditioning, do you have a vacation home? Your state and local property taxes, points, and mortgage interest may also be deductible for your second home.
8. And since we balance work and home, do you work AT home? An office in your home that is used strictly for business can be beneficial to your tax bottom-line. (The family room that doubles as an office does NOT qualify for deductions!) For a dedicated office though, any costs for maintaining the office, such as paint, carpet, and a proportion of your utilities, can be deductible.

Here’s wishing you all smooth sailing through this tax season!

A big thank you for the “tax facts” to:

Chuck Lehman, CPA
Lehman Bookkeeping Solutions, Inc
PO Box 328
Milford Center, OH 43045
937-935-3231
lehmanbookkeeping@embarqmail.com
www.lehmanbookkeeping.com

A Buyer Fights For:
– The very lowest price possible
– My new home to have all the features I’ve dreamed about
– A home in move-in condition, with no extra work required
– Everything to be updated and in perfect working order
– To earn incredible equity; I want this house to be the best investment I can make

A Seller Fights For:
– The highest price I can get
– Recognition that our house is the best in the neighborhood, it’s worth more
– Not having to invest in costly fixes for someone else, let the buyer take care of it
– My home is wonderful just the way it is, no home is perfect
– Making a Buyer who wants updates (carpet, appliances, windows): let them do it
– Recouping every dollar invested into maintaining and improving this great house
– To earn incredible equity; I want this house to be the best investment I’ve made

No party to a negotiation gets everything they want in the deal. The key is to understand the other person’s point of view so you can negotiate a deal both parties can live with. A Buyer should use comparable houses that have recently sold in the neighborhood on which to base their offer, not wishful thinking that is so far under the asking price that it insults the Seller. Sellers should be willing to consider making repairs or improvements that are meaningful to the Buyer…or offer to lower the price to accommodate the Buyer making the changes himself. A good deal, a fair transaction, will leave both parties feeling like they got the best price possible, and the most important concessions in the deal for their needs. Buying and Selling a home CAN be a win/win!

Often, buyers have shopped around online before they even approach a Realtor, and Realtors encourage their buyers to go online to get a feel for prices and the market. Remember the old saying, “You only have one chance to make a good first impression”? Well, that’s true when selling a home, too! Your home should be presented in the best possible way where it will be seen first, and most often. Multiple GOOD online photos from the first day on the market are a must!

Why do you find so many homes online with only one exterior photo? Or no photo? Honestly, it’s poor marketing. Over the years we’ve heard lots of excuses, from camera problems to Sellers not wanting photos displayed, and even “ugly house syndrome.”

I’m going to be blunt here: If you don’t have multiple photos of your house online the day you put your house on the market, that house is not going to sell as quickly or for as much as it might. It’s just poor marketing. You AND your home deserve better.

Buyers check online to see new homes that have come on the market…and they aren’t checking back days or weeks later to see if more photos have been added. The photos need to be there right away to make the impact you want!

We’ve all toured homes that were just lovely, but had no online presence. And most of us remember touring a home our Realtor had to “sweet-talk” us into seeing because the photos were lackluster…only to find it looked great in real life! Those homes, whether priced at $150K, or $1.5M, deserve better marketing. Even homes with blemishes or “issues” can be marketed with clever photos to entice buyers to consider homes they might otherwise have skipped. We know a buyer who fell in love with photos of golden hardwood floors and custom built-ins, and decided to overlook the reality of a railroad behind the house and toured the home despite her doubts. The floors were gorgeous, so were the built-ins, and the sunroom overlooking a lovely yard sealed the deal. She bought the home, railroad noise and all…and it was the photos that got her in the door! That’s the power of good marketing!

Frankly, all homes can be made to look their best in photos. Visual images of a home’s best features can entice a buyer, and keep them touring the whole home to see what they first saw online. It is a tool EVERY Seller needs, and it’s just good marketing practice!

BEFORE you select a Realtor, look at their online listings. All of them. Are there multiple photos? Do the photos showcase attractive features of the home? You are going to trust your Realtor to market your home in order to sell quickly and at a good price, so how are they marketing their other listings? And notice, too, how long the homes have been on the market. Its a good idea to ask the Realtor for the average number of days their listings spend on the market, and how that compares to your city’s average, too.

Bring a valid I.D. (drivers license): Everyone involved wants to be sure the right people are signing this day, so don’t forget it!

Checkbook: Even if you normally use only a debit or credit card. Sometimes there can be a small overage or miscellaneous fee that can be covered with a personal check or cash ONLY. Be prepared…. so you are guaranteed to close.

Cashier’s Check: Call and ask, the title company may not accept a personal check. If you’re unsure the exact amount to bring, get a cashier’s check for a larger amount that will cover the ‘worst-case’ scenario, and the title company will issue you a check at closing for the difference. Make the check out to yourself, and you can endorse it over to the title company at closing.

One more important note- a cashier’s check is like CASH – you can’t get another one issued. Make sure you keep this check in a very safe place.

1. Do you feel you understand the market, especially in your neighborhood? Are you comfortable with the laws, forms, contracts, and obligations of selling your own home?

2. Do you have a source or know reliable home inspectors, contractors, termite inspectors, real estate lawyers, and title companies?

3. Do you have enough time to research your asking price, market your home, show your home, negotiate deals, and answer a ton of questions by phone and email about your home, the price, and your deal-breakers?

4. Are you comfortable advertising your home? Do you know the most effective means to advertise, know how to produce flyers, ads, and brochures to attract buyers? Or do you have a friend or family member who could do it for you?

5. Is your home in a suburb or urban area with lots of foot and road traffic to see your sign and generate interest?

6. Do you have the right temperament to endure criticism, questions, and repetitive showings of your own home? Are you patient? Can you negotiate under pressure?

7. Are you flexible on the price? Are you comfortable with potential buyers lowballing their offers to include a discount for a lack of Realtor? Are you willing to offer a commission to a Realtor acting as a buyer’s agent? Are you aware some Realtors won’t show your home at all?

8. Are you comfortable with handling the financing issues, contingencies, and closing responsibilities?

Buyers tell Realtors all the time that they don’t like the photos, or that the house in question looks too dated, cluttered, small, or messy to consider. It may be in their price range and have all the features the buyer is looking for, but that first visual impression is crucial to catching the buyer’s attention and sparking their serious interest in a property.

Every homeowner works hard to personalize their home, to make it their home. It’s only human nature. But a buyer is looking at photos or walking through a showing trying to imagine personalizing your home to their tastes, their needs. A home with a strong personal style, outdated (no matter how lovely) décor, or a ton of mess and clutter is going to make it difficult for the buyer to picture themselves living there. So they don’t. They move on to another, more sale-ready home. Ultimately, these problems can lower the price you charge for your home. This is an issue that affects your bottom line!

A Home Stager can do two things for you. If you’ve already moved out, they can rent a few key pieces of furniture and knickknacks to make your empty house feel livable, thus encouraging a higher price. Or, more commonly, the Stager walks through your home taking notes of various changes she thinks would bring a higher price or make your home more attractive to buyers. This can be hard on you, especially since her goal is to de-personalize your lovingly decorated home! But it can earn a higher selling price.

Here’s the basics of Staging a home:

Get rid of clutter. The ultimate goal is to make it look like either a model home, or a magazine ad. Surfaces should be clear of clutter, floors should only have furniture and throw rugs, and your brother’s beer can collection needs to be put in storage for the duration of the sale.

Remove as much personality as you can. The stuff that makes your home yours is the stuff to put into storage for now. Family photos, collections, posters, unusual art, and even extra furniture can be stored during the sale process to make your home look cleaner, larger, and more inviting. This can even include painting a neutral color over that bright red accent wall or stenciled vine. Heartbreaking to undo what you did with love, but important to show your home well.

Clean, clean, clean. Remove any dirt or grime. Have the carpets professionally cleaned. Scrub the bathtub and replace any mildewed caulk. And if a wall is too dirty to wash? Paint it over. Your house needs to look as like a model home. And it doesn’t hurt to bake something right before a showing to make your house SMELL as good as it looks. (Take kids, pets, and litter boxes with you when you leave the house for a showing…it make a big difference.)

Update or repair problem areas. This can get a little pricey, but a good stager and your Realtor can tell you where you can get the most bang for your buck by renovating. It may be as simple as painting a bright wall neutral again, or it may be replacing torn carpet, or even remodeling a dated kitchen or bath. Perhaps spiffing up your curb appeal with some quick and simple landscaping. It’s worth hearing a neutral opinion before choosing what to work on and what must be “as is”.

Ask your Realtor for the name of a good Stager, or do a simple internet search. If you’d rather get your Realtor’s advice on what to change and try to stage your home yourself, click here to get a great Staging To Do List to get you started!

Of course they want to talk to you! There’s two very good reasons why you always get asked this question.

One: Ethics! A reputable, honest agent doesn’t want to “steal” another agent’s client. Real estate agents invest time and effort into their clients, and don’t want to interfere in another agent’s relationship with a client. If you decide the agent with whom you’ve been working isn’t right for you, talk to them and make sure you’ve ended the relationship or contract between you before beginning to work with another agent.

Two: Money! The Realtor is asking you if you are working with someone to find out if you are, in essence, offering earning potential, or if you’re asking for a donation. Many clients either don’t realize or forget that the only way an agent makes any money is when a sale closes. Everything they do for a buyer or seller until that closing is at their cost. Essentially, agents work for free, hoping to close a sale so they can be rewarded for that hard work.

Many of the questions a buyer or a seller ask take time and work to answer. If you ask to see a property, the agent has to schedule time that’s just for you. If you want to know if they know of any homes for sale that meet your needs, they have to do research and create a selection, often including a dozen or more listings. If you are asking for an estimate of your property’s worth, the agent must tour the property, research similar listings in the area, and create a list of comparable listings and present the estimate to you. No matter what the question, it takes time, expertise, and energy that cost real dollars and cents to answer.

Would you work for free? Maybe for a good cause, or a good friend, but on a regular basis for total strangers? Probably not.

Most real estate agents are either in business for themselves, or working entirely on commission. They work as a listing agent to sell a property, or as a buyer’s agent to find you the right property. They do all that work in hope of closing a sale to get paid. Any buyer or seller can do the work themselves, but it’s a complicated, difficult, and time-consuming process, so most of us choose to work with an agent to make it easy and pleasant. That hard work and dedication is why an agent asks if you’re working with someone.

That agent wants to be the agent to work with you!

Sign a Listing Agreement with your chosen Realtor.

Listen to your Realtor’s advice on how to present your home for a successful sale. “Staging” your home by removing some personal items, or making minor cosmetic repairs can be worth the effort, in dollars and sense!

Prepare your home for sale. Turn up the curb appeal, lose the clutter, and store some of your personal items. You are in a competition for buyers, so your home needs to look it’s best!

Evaluate how much your home is worth in today’s market. Use the market analysis provided by your Realtor, and the information you have about your own neighborhood. Remember, the market has changed, and when you’re competing to attract buyers, you must price your home well to sell.

Install the “For Sale” sign and lock box.

Stage your home well for showings. Make sure your home is clean, smelling and looking it’s best. Tidy up and take pets and kids to the park, or to a neighbor’s during the showing. Your home only gives each buyer one first impression, make it the best!

Wait. This is the toughest part of selling your home. Your Realtor should keep you updated, and give you feedback on the showings.

Consider the buyer’s offer. Are they pre-approved? What contingencies are offered? Is the offer financially acceptable?

Accept, reject, or counter the offer. But don’t forget, that upon rejection or countering the offer, the previous offer is now void.

Accept an offer. Now you prepare for inspections and contingencies. Typical inspections are for the whole home, gas line, well, lead, radon, and termites. If problems are found, buyers will ask for solutions. Be prepared to negotiate.

Prepare for your move. In addition to change of address forms, and changing the address for your bills and accounts, you’ll want to transfer utilities, hire a moving company, and prepare to say goodbye to the old neighborhood.

Close the sale, sign in a million blanks, initial a dozen more, and take your check to the bank!

There are 3 kinds of auctions:

1. Auction without Reserve: Also called an Absolute Auction, is an auction with no minimum bid. The property will sell at the final price, whatever that price may be. This type of auction often results in the highest price, as it attracts more buyers who then bid up the price against each other. It is, however the most risk for the seller.

2. Minimum Bid Auction: The seller sets the minimum price with the auctioneer, and the minimum price is advertised to the prospective buyers. This results in fewer buyers attending, but there is less risk for the seller.

3. Reserve Auction: Also called a Confirmed Bid Auction, it is an auction where the minimum price is not made public but the prospective buyers make bids, and the final bid must be confirmed by the seller as being acceptable before the sale is final. This type of auction attracts the fewest buyers, because there is no guarantee of having purchased a property even after investing the time and effort to place the highest bid.

Why sell at auction: Advantages for the seller:
• You know your home will sell on this date (unless you turn down the highest bid at a Reserve Auction.
• The buyer pays all closing and title costs
• There are no contingency clauses, no demands to be met, all sales are “as is.”
• Your property is only seen and bid upon by qualified, motivated buyers.

Why buy at auction: Advantages for the buyer:
• You know the seller is motivated and committed to the sale
• You control the price
• There is a ton of information about the property in the “due diligence” packet
• You know the sale and closing date
• A fast and firm sale

Buyer responsibilities
• Inspect the property and make sure it’s what you want/need.
• Get pre-approved by your lender, and know your maximum price (see below)
• Find out if the bid is the purchase price, or if there are fees added to the final bid.
• Be sure you want the property, that hefty deposit is often non-refundable. If the buyer backs out, the seller retains that deposit.

What are Seller costs?
The typical auction cost is about 8% of purchase price plus a promotion fee that is paid to the auctioneer at the start, by the seller. Despite this, and because the closing costs are covered by the buyer and there are no expensive contingencies, the result can be a net savings over a traditional sale for the sellers.

Are there bargains?
Can I sell at a good price? Auction sale prices average 95% to 105% of the suggested Comparative Market Analysis (CMA) price. Approximately 50% of auction sales actually go over the suggested CMA price. This means there are bargains to be had for savvy buyers, but sellers can be at ease knowing that although their price needs to be realistic, most homes at auction bring a good price near or over the CMA.

Should you consider an auction?
Yes. If your home must sell by a particular date, or you’re in a hurry to sell, an auction can give you that fast sale. Yes. If you’re pre-approved and willing to spend some time thoroughly vetting auction listings that interest you, you can find the right home fast.

If you are still looking for your own next dream home, or if you’re not sure if or when you’ll find it, you may want to sell your home in a traditional sale…giving yourself the gift of extra time, and the opportunity to change your mind. If as a buyer you make decisions over time and want to be able to negotiate contingencies, an auction is probably not for you.

* Because the tax year ends December 31, many buyers will buy now, rather than waiting until January. These are very motivated buyers!

* This is the perfect time for sellers! Casual Looky-Loos are home with holiday parties and plans, only serious buyers are looking now.
It’s the perfect conditions for listing. Your home is decorated and inviting, showing it’s best features…and the competition is limited, as other sellers take their homes off the market for a couple of months during the holidays.

* Smart sellers know they can list their home now to take advantage of the end of the tax year and serious holiday buyers and still enjoy the holidays in their current home. Sell now, and arrange for closing in the New Year!

* Your home looks great for the holidays, smells terrific, too, but you’re worried you should wait for “good weather” to show your home off to it’s best advantage? No worries! Display framed photos of your home in spring and summer in a prominent place, along with other info about the home. Buyers will respond to your smart marketing, and have a great idea of how fabulous your home is in the warmer months!