Oh, the Tax Benefits of Homeownership!

Owning a home is at the top of most people’s list of life goals, and with all the benefits, it’s easy to see why. From the pride that comes from owning something that is truly yours to building equity in your home to the stability of having a set mortgage, owning a home has many positive attributes. And best of all, owning a home may mean receiving additional tax benefits.

Homeownership can have many potential income tax advantages, including deductibility of property taxes and home mortgage interest (for taxpayers who itemize deductions) and exclusion of up to $250,000 of gain on sale ($500,000 for married couples filing jointly) if certain ownership and use qualifications are met. The particular tax results will vary according to each buyer’s personal circumstances, so it is important that you consult with your own tax advisor regarding these tax benefits.

Some good sources for information about the tax consequences of homeownership are the IRS publications on the subject, including Publication 530 “Tax Information for Homeowners”, Publication 936 “Home Mortgage Interest Deduction”, Publication 523 “Selling Your Home” and Publication 527 “Residential Rental Property (Including Rental of Vacation Homes).” These can be accessed at http://www.irs.gov/app/picklist/list/publicationsNoticesPdf.html.

I recommend that you consult with your own tax advisor and do your own research regarding the tax benefits of homeownership since benefits will vary depending on your personal situation and circumstances.

Pricing Your Home in Today's Market

Pricing is probably the most critical task you will face when
selling your home. Sellers naturally want to get the best price
and the best terms for their home for the time that it is on the
market. However, determining your home’s worth isn’t always
a straight forward process as there are pitfalls. If you price
your house too high, you may not receive any offers. and
your house may languish on the market for weeks, losing its
“marketability”. If you price it too low, you may end up losing
money.
Ultimately, the best price for your home is the amount that a
buyer is willing to pay at the time you’re selling. An experienced,
trained Realtor® will be able to help you gauge your
home’s value.
While several factors influence the pricing of a home, the
most common and reliable method is the comparative market
approach. Get a Comparative Market Analysis (CMA). This
is a report that provides a suggested sales price based on
the prevailing market. Your Realtor® can provide a CMA,
usually for free. It is not an appraisal. In a CMA, your
Realtor® examines recent sales in your neighborhood of
properties matching your house’s age, square footage and
features.
Active listings (other homes for sale) are scrutinized as these
listings are your competition. An examination should also be
made of withdrawn and expired listings. Very often these
listings didn’t sell because of pricing issues and you can
profit from these lessons. Based on this accumulated data,
your Realtor will arrive at what he believes is a fair and reasonable
price.

How important is cultural diversity at your school? - Defining your ideal school | GreatSchools

How important is cultural diversity at your school? - Defining your ideal school | GreatSchools

InRealEstate:Weekly Updated

Obama’s mortgage relief program growing

The Obama administration’s $50 billion mortgage relief program is finally picking up speed after a sluggish and disappointing start: Nearly one in five eligible homeowners has been offered help so far, the Treasury Dept. said Wednesday.

...

A Down Payment Anomaly

Despite home buyers being advised to issue down payments of at least 20 percent, many home buyers are finding that smaller down payments result in better interest rates—but also higher payments.

Rules put in place in late 2008 by Fannie Mae and similar rules adopted by Freddie Mac are less favorable to borrowers who put down 20 percent to 25 percent--partially because the GSEs consider these borrowers to be more of a credit risk since they are not required to purchase private mortgage insurance.

According to Fannie Mae, borrowers benefit from this industry practice because they are able to leave themselves a financial cushion by not issuing larger down payments, and can instead save the extra money for emergencies.

It is important to note though that smaller down payments mean higher monthly payments because the loan itself will be larger.

...

Behind FHA Strains, a Push to Lift Housing

As it tried to help shore up the ailing housing market during the past year, the Federal Housing Administration increased its exposure, particularly to mortgages in high-cost states that have also seen some of the sharpest price declines...

New normal for home sales: Buyers have the power

Following the downturn in the housing market, lenders started requiring more money up front, higher credit scores, proof of income, and all paperwork in order—quite different than earlier this decade when subprime mortgages were rampant and buyers purchased homes deemed unaffordable by today’s standards. For sellers, the standards are different too: Be patient and maybe lower the asking price, because the balance of power has swung strongly to buyers. Many REALTORS®, mortgage brokers, economists, and home buyers across the country say they’ve noticed a shift in attitudes that they expect will last for years.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Traditional sellers are finding that the number of offers received is not nearly as high as those received on REO properties, which often receive multiple bids. The negotiation process also differs between traditional sellers today and traditional sellers during the height of the market. According to one REALTOR®, if a house is not being shown, then it is overpriced. The record number of foreclosed homes on the market gives buyers even more leverage.

· Resulting from the credit crisis, lenders now often require much more paperwork and thoroughly review borrowers’ credit histories, bank statements, tax returns, and job histories. The average mortgage applications today starts three times thicker than what it was at the start of the housing boom, and often gets thicker as the process moves along. One mortgage broker reports that now lenders want to know everything about the buyer, “It’s a true and full underwriting process on every particular loan.”

· It is not uncommon nowadays for closings to take 60 days. One reason is because of the adoption of the Home Valuation Code of Conduct (HVCC), which often results in appraisers evaluating homes in areas they are not familiar with and often using comparables that are inaccurate. This has caused delays in closing sales, and in some cases, undermining sales because appraisals are coming in too low.

· Just about everyone in the real estate industry agrees that another dramatic boom-bust cycle isn’t going to happen again anytime soon. Albert Saiz, assistant real estate professor at the University of Pennsylvania ’s Wharton School , expects that new regulations and a different consumer mind-set will help real estate return to a more traditional cycle....

Current Bay Area Real Estate Market

...