Gary Dwyer's Real Estate Blog

A recent study from the National Association of REALTORS (NAR) showed that 89 percent of homebuyers chose a real estate agent to help them with the purchase of their new home in 2010 vs. 69 percent in 2001.

Some of the key reasons cited for this increase include the complexity of the buying process today, the desire to work with a licensed and trained professional, the myriad of issues that can come up with regard to financing, condo associations and title issues.

Other reasons noted were the desire for buyers to have someone help them evaluate a property, coordinate showings, provide negotiation expertise and assist them in managing the process.

In an effort to close some large tax loopholes in 2010, a provision was created that would have required all persons who receive rental income in 2011 to track and send 1099 forms to everyone that they did business with and paid over $600.00 for goods and services. 

For small landlords that may rent part of their home out, have a 2 or 3 unit home property, or even vacation home owners that rent out their property for a few weeks a year, this requirement would have been a onerous paperwork nightmare and would have required many to have to hire a professional accountant or tax preparer to deal with all of the required paperwork.

The National Association of REALTORS, along with other organizations and small-landlords, were able to convince Congress and the President that this level of paper-pushing was not going to have any demonstrable benefit and if anything, would be counter-productive to small, non-professional landlords.  Thankfully, the law was repealed today and the requirement is no longer in effect.

If you are one of the millions of Americans that benefited from the home buyer tax credits over the past few years, you may have to start to repay them when you file your taxes this year.

The Internal Revenue Service is sending a letter to taxpayers who claimed the credit that explains if, when and how they have to repay it. There are different IRS letters for different situations, including a purchase of a home in 2008, 2009 or 2010; a sale of a main home; or a change in the use of the main home.

For example, a taxpayer who claimed the full $7,500 first-time home buyer credit on their 2008 tax return will repay $500 as an additional tax on their returns each year from 2010 to 2025, or until the home is sold or is no longer used as the owner's principal residence.

The credit for homes purchased in 2009 and 2010 does not have a repayment requirement unless the home ceases to be used as the taxpayer's principal residence within three years of the purchase.

If you have questions, the IRS website at www.irs.gov contains detailed information about repayment requirements for the federal home buyer tax credit or consult with your accountant or tax professional.

Over the past few days I have been busy assembling my tax information in preparation my upcoming annual meeting with my tax accountant.  He does a great job and is always asking me questions about "did you do this or that" or "you may want to do this over the next year" in attempt to find me every possible legal tax deduction I can take.

One of the major deduction that was available in 2010 to homeowners was the energy tax credit for investing in upgrades to properties (generally primary residences but in a few cases second homes were eligible) that would make them more energy efficient.

As you are preparing to file your 2010 taxes (and thinking about investments for 2011) here is a link with a summary of federal tax credits available for improving your home's energy efficiency - http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

Forget a fancy dinner, chocolates, flowers or expensive jewelry.  Man or woman, homeowner or renter -everyone has the same item at the top of their Valentine's Day wish list - a lockbox.

As a buyer agent, I love lock boxes.  It makes a property much more accessible for showings and, particularly when it is the first showing, it can save the listing brokers time if my client doesn't think the property will meet their needs.  If the buyer likes the property, we can always schedule a second showing with the listing broker or follow-up with specific questions after the showing.

I also like lock boxes for after the sale and the buyer has the keys in their hands.  It is not uncommon for a homeowner (or a tenant) to get locked out of their house, thinking that they had the keys in their pocket.  Even worse, realizing that you have lost your keys on a Saturday evening out and it is now 1:30 a.m. and there is no one home to let you in.  Even if someone may have a set of keys for an emergency, the thought (and process) of waking someone up in the middle of the night is not pleasant.  In most cases, it requires the services of a locksmith which can be expensive and time consuming.

The simple solution is a lockbox which can be purchased at many hardware stores and home improvement centers such as Home Depot and Loews.  There are a variety of styles available - from ones that connect to a fence or pole to ones that can be screwed into a wall or fence post.  For $30.00 or so you can save yourself a lot of time, money and aggravation. 

So this year, spread the love on Valentines Day with a lockbox - they may not love you for it that night, but at some point you will be the love of their life!

As part of the condominium sale process in Massachustets, the seller must provide at closing a 6D certificate, signed by the Trustee(s) of the condominum association, that there are no past due condo fees or special assessments that are outstanding against the unit.

The certificate should be through the end of the month in which the closing occurs, not just to the closing date.  The condo fees will be pro-rated by the closing attorney between the buyer and seller depending upon the date that the closing occurs.

One of the most important financial benefits of owning a home is the ability to itemize and deduct mortgage interest and property taxes (as well as at least one more year for Private Mortgage Insurance (PMI)) when calculating your federal income taxes.

Many home buyers often ask what impact this will have to them and how to calculate the benefit.  Here is a quick example:

Assume:

$ 20,000 = Mortgage interest paid (a loan of $400,000 for 30 years, at 5 percent, using year-one interest)
$  5,280 = Property taxes (at 11 percent on $480,000 assessed value)
______

$25,280 = Total deduction

Then, multiply your total deduction by your tax rate.

For example, at a 28 percent tax rate: 25,280 x 0.28 = $7,078.40

$ 7,078.40 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.  Illustrative example only - check with your tax adviser for your specific situation.

If you are thinking about buying a new home or refinancing soon (or even if you are not), it is a good idea to check your credit reports to make sure you won't have any surprises.

You can check each of your credit reports (Equifax, TransUnion, and Experian) FREE each year. You won't get your FICO score for free, but you can check to see if there are any errors and start the process to get them resolved.

This is the link to the official free website developed by the three major credit reporting bureaus - https://www.annualcreditreport.com/cra/index.jsp

Boston area housing costs can be some of the highest in the nation.  Many times, first-time buyer are pretty strapped for funds to do renovations / updates after they have scrapped together funds for the down payment, closing costs and beer for their friends for helping them move.

A program that a lot of home buyers are unaware of is the FHA 203K loan.  This program allows the costs of needed repairs and improvements to be included in the FHA federally-insured loan amount instead of having the buyer come up with cash or a separate loan to do the work.

The work has to be done within six months after escrow closes. Borrowers have the option of putting up to six months of mortgage payments on the end of the loan if they don't want to live in the house while the work is being done.

FHA home loans require certain health and safety standards be met and that needed repairs identified during the inspection process be completed before escrow closes. However, minor repairs and improvements costing between $5,000 and $15,000 can be done after escrow closes for borrowers who opt for a streamlined repair program.

The loans can also be used to pay for improvements such as new appliances, second-story additions, remodeled kitchens and bathrooms, and skylights, just to name a few examples.

It is important that home buyers utilizing the 203K program work with a lender that experienced with the program since there are a lot of nuances to making sure everything is processed correctly.

Are you a first-time home buyer?

Are you just starting your home search?

Is your home search within the Greater Boston area?

If you have answered YES to these four questions, Buyer Agents of Boston and HGTV is looking for you!

We have been contacted by the producers of HGTV's "My First Place" to help them identify any first-time buyers that would be interested in appearing on the show.

We are looking for fun, high-energy people who are just startingthe home-buying process for their first place and would like to share their story with HGTV! Our goal is to capture all the trials and tribulations of looking for, bidding on and buying your first place.

Taping takes place this spring and summer.  Ideal candidates will be enthusiastic buyers with a great story to tell and a desire to share their experiences. Singles, couples and families are all invited to apply!

Candidates who complete taping of a My First Place episode will receive a DVD copy of their show so that they can relive their first-time home buying experience for years to come!

If you are interested in finding out more, just call us at 617 997-5570 or send an e-mail to garydwyer@yahoo.com