7 Homeowner Tax Advantages

When you’re evaluating how much home you can afford, make sure you factor in the tax advantages of homeownership.

1. Homebuyer tax credits

If you purchase your first home before April 30, 2010, you’re entitled to a tax credit of up to $8,000. If you currently own a home, but sell it to purchase another home before April 30, 2010, you’re eligible for a federal tax credit of up to $6,500.

2. Deductions for loan fees

Typically, you can deduct the “prepaid interest” you paid when you got your mortgage loan. That includes points, loan origination fees, and loan discount fees listed on your settlement statement, even if the seller paid those fees for you. Each time you refinance your home, you can deduct prepaid interest fees.

However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you’re following the rules.

3. Property tax deductions

In the year you purchase your home, you’re entitled to deduct the real estate taxes you paid at the closing table. You can continue to deduct the property taxes you pay each year.

4. The mortgage interest deduction

Every year, you can deduct the amount of interest and late charges you pay on your mortgage and home equity loans, though there are limitations. If you’re required to purchase private mortgage insurance (PMI) because you made a downpayment of less than 20% on your home, you can also deduct those premiums as mortgage interest expenses.

5. Home office expenses

If you have a home office you use only for business, you may be eligible to deduct the prorated costs of your mortgage, insurance, and other expenses related to that space. The government scrutinizes home-office deductions closely. Be sure you’re entitled to the deductions before claiming them.

6. The costs of selling your home

In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees. You can also deduct decorating or repair costs you incur in the 90 days before you sell your home.

7. The gain on your home

If you lived in your home for at least two of the previous five years before you sell it, the government lets you to take up to $250,000 of profit on the sale of your home tax free. That amount is doubled for married couples. This deduction isn’t available on rental or second homes.

The government also allows you to subtract from your home sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn’t count.

This article includes general information about tax laws and consequences, but is not intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws vary by jurisdiction.

More on the mortgage interest deduction
Claiming your homebuyer tax credit

Tips to use when preparing your return

Other web resources

More information on homeownership deductions

IRS information on the mortgage interest deduction

By G.M. Filisko

7 Tips for Improving Your Credit

Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.

1. Know your credit score

Credit scores range from 300 to 850, and the higher, the better. They’re based on whether you’ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You’ll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms. 

You’re entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax, Experian, and TransUnion. Access all three versions of your credit report at www.annualcreditreport.com. Review them to ensure the information is accurate.

2. Correct errors on your credit report

If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there’s an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.

3. Pay every bill on time

You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You’ll also save money because you’ll keep the money you’ve been spending on late fees. Credit card or mortgage companies probably won’t report minor late payments, those less than 30 days overdue, but you’ll still have to pay late fees.

4. Use credit carefully

Another good way to boost your credit score is to pay your credit card bills in full every month. If you can’t do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.

5. Take care with the length of your credit

Credit rating agencies also consider the length of your credit history. If you’ve had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you’re not using them.

6. Don’t use all the credit you’re offered

Credit scores are also based on how much credit you use compared with how much you’re offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.

7. Be patient

It can take time for your credit score to climb once you’ve begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you’ll do to your credit score.

Other web resources

How FICO scores are calculated 

Answers to frequently asked credit report questions

6 Ways to Increase Your Home's Value

While you can't protect yourself against market ups, downs, and corrections, you can take small steps to help increase your home's value and make it more marketable. The following tips are meant to inspire and motivate you to treat your home like the investment it was meant to be!

1. Make Repairs: Homes require regular maintenance and repairs are a necessary component of homeownership. Procrastination gets you nowhere when it comes to home value. Stay on top of repairs as they are needed. And be sure to address large projects before placing your home on the market. For example, roofs are expensive to replace or repair. Many buyers will pass up your otherwise wonderful home when faced with roof issues.

2. Curb Appeal: Curb appeal is about first impressions. It is also about neighborhood values. Drive down a street lined with manicured lawns and well-maintained homes and the values are sure to reflect the care their owners take. On the other hand, streets with overgrown trees, junky yards, and chipped and faded paint are fighting an uphill battle in the values game.

3. Update Your Kitchen: Kitchens are a real selling point. Outdated cabinets, counters, and appliances will stick out like a sore thumb to buyers. Be sure, however, that you research your comparables before beginning a remodel. You don't want to price yourself out of the running. This means if while you love granite and travertine, other homes in your area are selling with laminate, you will probably not be able to ask for a drastically higher price that covers the price of the granite.
(Updated kitchen can increase your home's value by 5%-10%!)

4. Update Your Bathrooms: Bathrooms also hold much of a home's value. New low-flush toilets cost as little as $100. And tubs and showers can be easily replaced or resurfaced. Be sure, above all else, that your bathrooms are clean for showings.

5. Energy Savers: Buyers are looking for homes that are energy efficient. Low-flush toilets, solar panels, water filtrations systems, and insulated windows are all inexpensive fixes for energy zappers.
Consider these simple tips and decide for yourself what may help your home retain its value.

6. Community Involvement: The classic quote from Chinese philosopher Lao-tzu says, "A journey of a thousand miles begins with a single step." This is especially true for improving the health and wealth of a community. Change starts with yourself. By becoming an active member of your community, you can inspire the change you desire. Family, friends, and neighbors will follow your lead of civic duty. How can you get involved? Run for city council, join the PTA, volunteer, and help organize fund raisers and events that inspire community togetherness.

Realty Times
Published: February 9, 2011


And to add 2 more ways to dramatically increase your home's value:
1 - Finish your unfinished basement! Finished basements don't have to be expensive. Some drywall (drywall doesn't cost much), carpet and paint, and you have more living square footage for yourself or any potential buyers out there, beating out your competition.
2 - Add bedrooms and/or bathrooms. This could most easily be done by finishing an unfinished basement, or getting creative in the rest of the house - dividing up a huge room, for example. Just make sure you don't make it too crowded, or else it may defeat the purpose.
A rough rule of thumb is that adding a bedroom increases the value by around $10,000, and adding a bathroom increases it by about $5000!

The Best Home Buyer App for Your Smartphone

All the reviews are saying that the Realtor.com App for Android and iPhones is THE BEST app for home buyers to use: you can search and find houses by area on the map, plus it has a gesture highlight feature with sharing options via email and social media. However the Android version exceeds with the capability to display listings on the home screen via a widget, voice entry, and view property surroundings on Google Maps with Google’s StreetView. Check it out today..it's free!

To get this app for any smartphone click here!

2011 Denver Metro Trends

As a quick recap, last month (January 2011) total combined MLS Residential Statistics in the metro area (from the mountains to Aurora, and Fort Lupton to Lone Tree) had the following changes compared to January of 2010:

• Decrease in the Number of Closed Sales to 1,724 (down 6.4%)
• Average Days on Market increased to 120 days
• Number of Active Listings increased 5.2% to 13,714
• Absorption Rate increased to 8.1 months (up 21.4%)
• Average Sold Price increased (up 6.7 % from $260,530 to $277,922)

Beware though, that each price range differs dramatically. Here are the Months of Inventory stats (months of inventory are the number of months it would take for all the properties on sale right now to be sold at the current rate they're selling at right now). Below 6 months is considered a "Seller's market", and we're seeing that houses are selling at almost lightning speeds under $210,000, and average up to $315,000. Colorado is different than the rest of the nation! 

$0-$85,000            1 month of inventory

$85k-$135k          2.4 month of inventory

$135-$210           2.6 month of inventory

$210-$315           6 month of inventory

$315-$460           6.9 month of inventory

$460,000+           15 month of inventory

And if you take short sales (which are very long sales) out of the mix, the month of inventory are even LESS. 

Click here to see each city or area you're interested in!

Make Your Shower Tile Like New

TILE COUNTER

General Information: One of the problems with tile is the buildup of soap scum. A small amount of white vinegar or lemon juice on a cloth will solve the problem.

A Poor Settlement: When grout cracks appear between the tiles it is usually casued by settlement or shrinkage and can only be fixed by removing the old grout and re-grouting.

Here Ye, Here Ye, Soap Stains Grout: Grout stains are usually caused by moisture and soap stains. Could be stopped by wiping down tile after bathing or turning on an exhaust fan.

How Loose I Am…..: If the soap dish loosens up there is no way to tighten it without removing it and re-installing it. Make sure you caulk it well !!

Maintain Your Home in Any Season: Home Maintenance Tips & Schedule

A key to protecting the investment you’ve made in your home is by following a regular maintenance schedule. By performing preventative maintenance on an on-going basis, you’ll avoid many of the big ticket repair items that can lower the value of your home. Here are helpful checklists for monthly and fall maintenance.
Monthly
		Test your smoke alarm and carbon monoxide detector.
		Check the filters on your heating and cooling systems.  Be sure to clean and change according to the manufacturer’s schedule.
		If you have a humidifier or an electronic air filter, check these as well.
		Check faucets for drips.  Check plumbing for leaks.

Winter 

Inside
	Check furnace air filters each month during the heating season.  Clean or replace as necessary.
	Consult your owner’s manual for your hot water heater.  Most recommend draining a dishpan full of water from the clean-out valve at the bottom of your hot water tank to control sediment build-up to maintain its efficiency.
	Check all fire extinguishers. Recharge or replace as necessary.
	Review family’s escape and preparedness plans for fire and natural disaster.
	Check locks on doors and windows to ensure they are functioning properly.
	Make sure the basement floor drain’s trap contains water.  Refill as necessary.
	Throughout the winter, watch for excessive moisture build-up.  Take necessary action whenever excessive build-up exists to prevent future maintenance and health problems.  (For example, excessive condensation on windows.)
	Test all faucets and monitor for signs of dripping.  Change washers as needed.  (If a faucet leak persists, it may need replacement.)
	Check and clean drains in sinks, bathtubs, shower stalls and dishwasher.
	Test all plumbing shut-off valves to ensure they are in proper working order.
	Monitor windows and doors for cold air leaks or ice accumulation. Note any problems for  repair or replacement in the spring.
	Check attic for frost accumulation.  If there is excessive accumulation, it may require repair.
	Before installing indoor or outdoor seasonal lights, check all electrical cords, plugs and outlets for signs of wear.  Test cords and plugs, if they feel warm to the touch or show any signs of wear, replace immediately.
Outside
	Test all outside lights and timers to make sure they are functioning properly.
	Before installing indoor or outdoor seasonal lights, check all electrical cords, plugs and outlets for signs of wear.  Test cords and plugs, if they feel warm to the touch or show any signs of wear, replace immediately.
	Check roof for ice dams or icicles.  If there is excessive staining or frost on the roof’s underside or excessive ice accumulation on the roof itself, it may require repair.

Colorado Ranking High Again as Technology and Education State

Colorado ranked No. 3 in the Milken Institute's 2010 State Technology and Science Index, released Tuesday. The index, published every two years, evaluates states based on their ability to leverage their tech and science assets to attract companies and high-paying jobs.

Colorado ranked second in the percentage of its adult population with a bachelor's degree or better, even though it was 47th in state appropriations for higher education per capita.
The state was sixth in terms of Inc. 500 companies per 10,000 business establishments.
Colorado maintained its No. 3 ranking, behind Massachusetts and Maryland. The study specifically noted former Gov. Bill Ritter's work with the "New Energy Economy" and the creation of a "Jobs Cabinet."
Colorado ranked 6th in "risk capital and entrepreneurial infrastructure," which measures venture capital resources, patenting activity, new businesses formed and initial public offerings.  

The Denver Post

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How they rank

1. Massachusetts
2. Maryland
3. Colorado
4. California
5. Utah
6. Washington
7. New Hampshire
8. Virginia
9. Connecticut
10. Delaware
Source: Milken Institute

"New construction homes aren't for me" ...think again

If you think that new-construction homes aren't for you, are a hassle and something to steer away from, read this. 

I had the privilege of helping my wonderful clients Ike and Tiffany buy a home. After looking at several homes in Highlands Ranch and Parker over a few months time, Ike and Tiffany happened to stumble upon a new development on their drive home. They thought, "Hmm, what about new homes?"  And the rest is practically history. They fell in love with a beautiful just-built home in the Jordan Crossing development in Parker. Think about it: brand new EVERYTHING:
2 stories, 3-car garage, 2400+ sf plus a 1000sf basement, 4 bedrooms, 3 baths, landscaping, nice backyard (unlike some developments), steel foundation (much better than concrete), new stainless steel refrigerator, stainless steel oven and gas stove, stainless steel microwave, stainless steel dishwasher, new beech cabinets, slab granite, tile, new carpet, new hardwood floors, new top of the line front-loading washer and dryer, new paint, new window coverings, new....you get the idea. And all this for a very affordable price in the mid to upper $200k's!

It just goes to show the adventure of home shopping, and you never know what you may fall in love with. Ike and Tiffany sure didn't think they'd end up in a new construction home!

Congrats to Ike and Tiffany on their BRAND NEW home!

The Wall Street Journal: 2010 - Real Estate Outruns the Stock Market Again

Real-estate stocks are poised to end 2010 with gains that are twice as large as the broader stock market, the second year in a row that REITs outperformed the major stock indexes.

REITs, as measured by the Dow Jones All REIT index, were up 27% as of Tuesday’s close. While that is a smaller gain than last year, when REITs posted gains of 28.5%, the 2010 results handily beat the Dow Jones Industrial Averages, up 11% as of Monday’s closing and Standard & Poor’s 500 index, up 12.86%.
The REIT rally was triggered by investors hunting for higher dividend yields. REIT dividend yields, while low compared to historical standards, are currently around 4% compared to 3.35% on Treasury bonds.

“The REIT yields are very attractive compared to anything else in the market,” said Brad Case, vice president of research and industry information for the National Association of Real Estate Investment Trusts. Since the beginning of the year, dozens of REITs have raised dividends, an about-face from last year when many REITs were cutting or suspending dividends.

Other investors were buying real-estate stocks based on economic fundamentals, basically a belief that commercial landlords will post stronger earnings from rising rents and occupancy in 2011.
Most of this year’s gains came early in the year after a number of REITs were able to successfully recapitalize their companies by selling large amounts of stock and bonds. The recapitalizations eased fears that a number of large companies would be forced into bankruptcy. By the fourth quarter, however, REITs failed to outperform the broader indexes as investors began to fret that stubbornly high unemployment might drag down the industry’s prospects and delay the time when landlords can raise rents. The DJ All REIT index was up 7.2% for the fourth quarter through Tuesday’s close, almost in a dead heat with the 7.3% return for the Dow Jones Industrial Average and modestly trailing a 10.28% gain for the S&P 500.

Written by A.D. Pruitt for The Wall Street Journal, Published December 29, 2010
For full article, click here.

5280's The Ultimate Mountain Guide

Where to ski, board, stay, eat, drink, shop, play, and buy real estate in Colorado's best mountain towns.


Here is 5280's list (no surprises here):

Telluride

Aspen

Durango

Breckenridge

Steamboat Springs

Crested Butte

Vail

For Details on each mountain area, Click Here

October 2010 Denver Stats: Home Prices Up, Sales Down

Sales of existing homes in the Denver area dropped 28 percent in October, to 2,842 from 3,958 in the same month of 2009, according to Metrolist Inc. data released Wednesday.

But average sold price for such homes was up 9.6 percent for the same period, to $261,750 from $238,807.
Sales of existing homes — which are homes that have sold at least once and also are called resale homes — were higher in October 2009 than last month partly because the federal government’s $8,000 first-time homebuyer tax credit still was in effect last year. The first-time buyer credit, along with a $6,000 credit for existing homeowners wanting to buy a different home added in November 2009, expired April 30 of this year.

Metrolist data includes both standard houses and condominiums. Greenwood Village-based Metrolist is metro Denver’s Multiple Listing Service for homes that are for sale.

Other existing home sale data for October:

• Standard houses alone, also called single-family detached homes, sold for $287,048 on average, up 9.66 percent from $261,771 in October 2009.

• Average days a home stayed on the market for sale rose to 104 from 93 for the same month last year.

• Inventory of existing homes for sale increased 12.75 percent to 21,360 last month from 18,945 year over year.

For this year’s first 10 months, roughly 26,200 existing houses sold for a total of $7.41 billion, according to Metrolist data released by Re/Max Alliance of Arvada. Average sold price for the period was $282,819.
The plains area of Boulder County had the highest average selling price of $650,053, followed by the city of Boulder, with $609,638.

By comparison, some 28,000 existing houses sold in 2009’s first 10 months for a total of $7.38 billion and an average of $263,328.

Nearly 7,000 existing condos sold in 2010’s first 10 months, for a total of $1.1 billion and an average of $160,186.

January through October 2009, nearly 7,500 condos sold for $1.19 billion and $160,382 on average.

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Compiled by the DBJ’s Paula Moore

Once Again Forbes & CNBC Rank Colorado 3rd & 4th-Best State for Business

For the second year in a row, Forbes has once again ranked Colorado the 4th best state for businesses and for fostering economic growth.  CNBC has rated Colorado the 3rd best state two years in a row.


"Even in this tough economy, Colorado has remained aggressive, disciplined and focused when it comes to supporting businesses and encouraging economic growth," Gov. Ritter said. "Today's ranking by Forbes shows that our strategies and investments in emerging and innovative industries like clean energy, healthcare, aerospace, biosciences and technology are working. We still have many challenges ahead, but we are indeed moving forward."


The Forbes ranking puts Colorado first for labor supply, sixth for overall economic climate and growth prospects, and ninth for quality of life.

10 Worst Cities for Real Estate Investing (Denver & CO is not one of them)

These are the ten cities where home prices fell the most over the past year have been plagued by unemployment, and most were in states that had the biggest speculative bubble. In contrast, Colorado and Denver are on almost all of the top 10 GOOD lists.  

These ten worst real estate markets according to Kiplinger are:

1. Detroit – Livonia – Dearborn, Michigan

2. Las Vegas – Paradise, Nevada

3. Phoenix – Mesa – Scottsdale, Arizona

4. Merced, California

5. Miami – Miami Beach – Kendall, Florida

6. Modesto, California

7. Orlando – Kissimmee, Florida

8. Lakeland – Winter Haven, Florida

9. Salinas, California

10. Cape Coral – Fort Myers, Florida

Kiplinger provides detailed information about the housing markets in these cities and CLICK HERE to get more information about these markets

Where to Take Out of Town Visitors in Denver

If you're like me, you're always trying to impress out of town guests with what Denver and Colorado has to offer. Here's a great list you can Googlemap and always come back to so you can make sure you're not saying "Uh, umm, let me think where we can go..." while your guests are rather unimpressed:

Denver Flair:

Larimer Square

Historic Lodo District (take a stroll)

Confluence Park (take a ride down Cherry Creek in a punt)

16th Street Mall

Denver Art Museum

Wash Park (Denver's "Central Park")

Denver Mint

Museum of Nature & Science

Cherry Creek North

Water World

Indoor Sky Diving (super-fun!)

Tattered Cover Bookstore

Mountain Towns:

Grand Lake

Estes Park

Idaho Springs

Ouray

Breckenridge

Steamboat Springs

Vail

Scenery:

Garden of the Gods

Red Rocks

Royal Gorge

Rocky Mountain National Park

Telluride

Unique Tours:

Molly Brown House

Air Force Academy

Wings Over the Rockies

Favorite Drives:

Black Canyon of the Gunnison

Independence Pass

Mt. Evans Drive

Red Mountain Pass

San Juan Skyway/Million Dollar Highway

Trail Ridge Road in Rocky Mountain National Park

Glenwood Canyon

Maroon Bells, Aspen

New Short Sale Bill Submitted to Congress

U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week.  H.R. 6133, "Prompt Decision for Qualification of Short Sale Act of 2010," is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.  This legislation aims to "require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale."



In this bill, the terms "short sale" means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a residential mortgage loan that:

• will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and
• requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder.

Ms. Golder continued, "Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time. Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives."
Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be foreclosed upon.

Read full article