Realty World – Corral Hollow Real Estate

 
Are you done with your Taxes yet?  Wait!… With April 15th just around the corner, here are some tips to help you….
 

 
Reap the tax deductible rewards of home ownershipIf you’ve purchased, sold or refinanced your home in the past year, tax season is the best time to reap the benefits of being a homeowner! Take advantage of some of these tax breaks today and you could enjoy a bigger return in April!
Mortgage Interest. For most homeowners, the bulk of your mortgage payment is going towards interest – and that’s a big tax break for you! The mortgage interest on your primary residence is fully tax deductible, unless, of course your loan is more than $1 million.
You can also deduct late payment charges as home mortgage interest as long as the payment was not late due to a specific service received in connection with your home loan. Also, if you pay off your mortgage early and incur a prepayment penalty, you can deduct that penalty as home mortgage interest (subject to the same requirements for late payments).
Property Taxes. Your property taxes – the annual taxes based on the assessed value of your property – can also be deducted. Your mortgage interest statement may list the amount of real estate taxes you paid if your taxes and homeowners’ insurance went into an escrow account when you closed on your mortgage. You can also review your cancelled checks to determine your total real estate tax deduction.
Loan Points. Any points you paid to get a better rate on a home loan, are tax deductible in the year you made the purchase as long as:

The loan is secured by your primary residence and it was used to buy, improve or build the home.
Paying points is an established business practice in your area;
The points are computed as a percentage of the loan principal;
The points are clearly defined on the buyer’s settlement statement; and
You put cash into your home purchase in an amount at least equal to the points you were charged.  

Loan Points on a Refi. The points you paid on a refinanced loan may also be tax deductible, however in most cases, the points must be deducted over the life of the new loan. So if you paid $2,000 in points to refinance a 30-year mortgage, you can deduct $5.56 per monthly payment, or a total of $66.72 if you made 12 payments in one year on the new loan.
Interest on a Home Equity Loan. The interest on a home equity loan may be tax deductible up to $100,000. However, if your home equity loan, when combined with your first mortgage amount, increases the debt on your home to an amount more than the property’s actual value, you’ll face deductibility limits. In these cases, the IRS allows you to deduct the smaller of interest on a $100,000 loan or your home’s value less the amount of your existing mortgage.

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Listing Commissions
Real estate brokers normally charge a commission for listing and selling your home. The rate varies, both by region and according to service level. In most areas the commission is calculated as a percentage of the sales price and rates of up to 7% are not uncommon.  Your listing contract will specify both the amount of the commission and the timing for when it will be paid.  Like everything else in real estate, commissions are negotiable.
Discount commissions
It wasn’t to long ago that commissions below the “going rate” for an area were all but unheard of.  These days though, there are many brokers and agents willing to list your home for considerably less than the 7% that might be typical for the area.  You need to be aware though, that lower commissions are nearly always tied to lower levels of service.  Most agents willing to list your home for a bargain commission rate aren’t going to do any advertising or marketing of your home.  They will probably just list it with the local MLS and put a sign in your yard, and that’s about it.  Meanwhile, a full service, full rate agent will probably spend considerable time and money to advertise and market your home – particularly to other agents in the area.  So, when considering a low commission, be sure you know exactly what you’ll be getting, and what you’ll be giving up.
Often, lower commissions will be part of a package deal where you agree to use a particular mortgage broker or you agree to buy your next home through the same agent that sells your present one.  There are some good bargains to be had with these package deals.  But again, it pays to examine the details closely, and make sure the whole package fits your needs.
Paying commissions
It’s important to understand how commissions are earned, and when they are paid.  Your specific listing agreement will spell out the details.  In general, a broker is considered to have held up his end of the bargain when he brings you a “ready, willing and able” buyer.  If the broker finds such a buyer, and you change your mind and back out of the deal at the last minute, the broker is probably going to expect you to pay the commission anyway, since he did his job.
Buyers Commission:  Buyers do not have to pay a commission when purchasing a home! …unless the buyer hires an agent to find a suitable home and is willing to pay for the agent’s work and time. In this senario there should be a specific, written contract to  make sure both parties agree and understand the terms.
In general when a home has been entered on the local Multiple Listing Service (MLS) for sale, the listing agent points out how the commission will be shared in case another agent brings in a willing and able buyer.  Common practice is that the listing agent and the buyer’s agent share the total commission in a 50/50 split.
 

Many of you bought your home in 2008 and 2009 using the $8,000 tax credit.   
Here are some usefull links directly from the IRS to help you file the tax credit properly:

Basic Information
Claiming the credit on your tax return
Homes purchased in 2008
Homes purchased in 2009
Scenarios

In case you do file your tax return your self  and need help you can visit the official IRS website by clicking here.

               

News you can use:  February Newsletter is here and it is, as always, full of useful tips and information that you can use. 
 
 
Topics included in this month’s Newsletter: 

How to repair your home without damaging your wallet
Exterior remodeling proves best bang for your buck
Homebuyer tax credit boosts economy
Understanding the buyers mindset
View current mortgage rates 
January round up: mortgage rate trends

If you have any ideas or tips on topics for next month please share it with me; I would be glad to research it and publish it.
 

Image by joiseyshowaa via Flickr
 

Do you live near intersection or high traffic areas?  Here are some useful tips on how to reduce the traffic noise, enjoy your outdoor activities and have a nicely landscaped backyard, all at the same time:  How to dampen traffic noise