While 2011 was clearly a challenging year, there is a lot to be positive about looking ahead. Economically, while buffeted by natural disasters and fiscal policy indecisiveness at home and a European sovereign debt crisis abroad, the U.S. economy was able to stave off economic stagnation in 2011 and is likely to continue to do so in 2012.

Housing statistics and the duration of the housing downturn to date indicate that 2012 may be the year we begin to turn the corner. In the summer of 2011, economic concerns peaked as the economy appeared to be on the brink of stagnation. Since the recession officially ended, this was a nadir for the economy as consumer confidence Data as of November 2011 plummeted, concern about a double-dip recession resurfaced, and fiscal policy indecisiveness reached its zenith. In the second half of the year, and heading into 2012, most major economic statistics are exhibiting an encouraging level of stability and positive, but weak, trends. Though the pace of growth is slow, it is to be expected in an economic recovery caused by a financial crisis.

Households are paying off their debts and at the same time accessing credit more easily. Surprisingly, households also added Home Equity Lines of Credit in the third quarter for the first time since the financial crisis began, which is a positive sign of access to liquidity that softens the impact of income shocks. A quarterly survey by the New York Federal Reserve Bank1 shows that total household debt continues to decline, but at a slowing pace. During 2012, households will need to find their equilibrium between household debt levels and consumption.

Consumer sentiment rebounded strongly in the latter part of 2011, posting a six-month high in December. While still low compared to pre-recession levels, this figure indicates an improving belief in the strength of the economy in 2012.

The labor market seems to be ever so slowly clawing its way toward recovery. In December, jobless claims were at their lowest level since 2008. The unemployment rate is proving stubbornly persistent and gains are often due to declines in the number of people participating in the labor force. The consensus is that unemployment will remain high in 2012 and that it will take a number of years to reduce the level significantly. Nonetheless, there has been consistent private sector job creation in the latter half of 2011. We can expect the persistence of unemployment to be a particularly contentious issue in the 2012 election year.

Housing is an industry with long business cycles. Typical regional housing recessions have taken anywhere from three to five years to find their bottom. The national housing recession has behaved similarly in that it has bounced along a bottom for the past two years. While prices are declining again to new lows, affordability is rising dramatically due to a combination of house price deflation along with rock-bottom mortgage interest rates. Adjusting for inflation, this has been a “lost decade for housing as prices are the same as at the beginning of the millennium.

The time is right in 2012 for prices to begin growing again and housing affordability will put a floor under any further significant declines in 2012. The spring and summer buying season in 2012 will be watched very closely for positive signs of demand.

Most housing statistics basically moved sideways in the latter part of 2011. Builder sentiment is improving ever so slowly, but remains at very low levels. Housing starts are also increasing, driven mostly by multifamily starts. Even single-family housing starts began increasing at the end of 2011. Both single family starts and permits rose at an annualized pace of 15 percent over the six months ending in November 2011. Existing home sales also started to trend upward at the end of 2011, and were 12 percent higher in November 2011 compared to January 2011. 

Putting all of these statistics together indicates there is a very long way to go and that the housing market is likely to sustain these trends in 2012. While we cannot say with a high degree of certainty what 2012 has in store for us, indications based on the latter part of 2011 are that both the broad economy and the housing market are moving toward positive growth in 2012. However, some impediments do exist including slower global economic growth, a recession in Europe, and fiscal and political uncertainty in the U.S. Taking these facts and trends together, we are bullish on the prospect of improving economic performance in 2012 from 2011.

Article Source: http://rismedia.com/2012-01-22/finding-the-positives-in-economic-and-housing-conditions-in-2012/

Summary

As 2011 came to a close, East Atlanta continued to see a challenging market for sellers and a strong buyer’s market. There are many factors affecting the change in prices and market activity. Let’s take a closer look, because there really are strong dynamics affecting the area.

A Look At The Numbers

The significant price drop seen in East Atlanta late in 2010 (after the tax credit) seems to have stabilized somewhat in 2011. While this chart shows another significant drop in the median home price in 2011, there are certain factors that may be contributing to this trend:

The total number of homes sold in the last quarter of 2011 was up significantly over the last quarter of 2010. This makes perfect sense as we saw very slow buyer activity the last half of 2010, after the tax credit. Buyer activity appears to have picked up, which is very good news. We see that the total sales overall for the year were up slightly as well.

However, if we look at the prices, they are actually down fairly significantly in 2011 over 2010. One reason for this is that there were 3 home sales that were very high for the neighborhood early in 2010 (two homes sold at $387K and one at $425K). Looking at 2011, the highest sale was $320K and after that, prices dropped down under $300K. So, when we’re looking at a fairly small number of home sales, a few strong sales can skew the numbers.

Another factor that can affect the median price figure is on the lower end of the price range. I think it’s important to look at the number of sales under $100K. This isn’t a scientific number, but I think it’s a good indicator of how much “investor” activity is happening in our market. We can see that in 2011, the number of home sales under $100K was up 40%. That’s a pretty staggering statistic. Most of these sales are to investors – buyers who are either purchasing them to hold as rental properties, or are renovating them for resale.

While it’s difficult to demonstrate with factual numbers, it makes sense that the general price change in the neighborhood has a trickledown effect. If the retail prices of homes are down, the investors must get a lower price on the purchase of the investment property to be able to make a profit. So, the prices of the lower priced properties would naturally decrease.

A Look at the Numbers Continued…

Let’s take a closer look at the sales of homes in the last quarter to get an idea of what is selling:

Not surprising, there are more sales of 3BR/2BA homes than 2BR/1BA. In fact, it is becoming very difficult to sell a 2BR/1BA home at all if you’re a homeowner that bought in the last 7-10 years. This is because the prices of 3BR/2BA homes have dropped enough that they are certainly affordable for first time buyers. The primary market for 2BR/1BA homes is investors – again, they are either going to hold them as rental properties or renovate them. And, the price has to be very low for an investor to do a larger renovation to turn a 2BR/1BA into a large enough home that it will easily resell. One note here: even though this chart shows that 4 of the 5 sales were “Traditional/Homeowner”, only 2 of those are what I would consider retail sales to an owner occupant. The others, even though they weren’t a foreclosure, were indeed “fixer upper” homes. Hence, the incredibly low median price of $35,000.

When we look closer at 3BR/2BA homes, this is where we see most of the activity for sales to owner occupants. Of the 16 sales, half were either investor/renovations or new construction. And, nearly half the sales were short sales or foreclosures. There is quite a price range here, indicating that there are still quite a few sales of the lower priced homes. Anecdotally, I can say that the investors I work with are typically looking for homes that already have big square footage and are 3BR/2BA. So, while more of these home sales are “retail”, many of them are also going to be fixer-upper properties. That does bring the median price down a bit.

Conclusion

It looks like we’ll have another challenging year in 2012, but I do feel very optimistic that we are in a much better position to help our sellers with more options. At Red Robin, we know what the competition is and how to get a house sold. And, we work closely with a fantastic attorney who specializes in short sales. Additionally, we are now offering full service rental property management to meet the needs of our clients. While many other realtors have gotten out of the market because of its challenges, Red Robin Group is committed to the neighborhood and to helping homeowners as well as guiding homebuyers.

We’re all in this crazy market together and we’ll continue to keep you updated!

Article by: Mary Umberger for Inman News

Don’t get Steve Somogyi wrong. He doesn’t hate all brass finishes — just the really shiny, yellow-toned stuff that he thinks screams “Cheap!” when homebuyers notice it in light fixtures, switch plates, doorknobs, etc.

That brass tone was fashionable a couple of decades ago, but its day is done and it has to go if it’s in a house you’re trying to sell, according to Somogyi, a real estate agent and interior designer.

In prepping a small house for the market recently, he switched out every single brass light fixture, switch plate, door hinge and knob for ones with an oil-rubbed bronze finish that’s a very dark brown.

By buying the replacements from a big-box store and a website specializing in closeouts, the homeowner spent $300 to $400 for materials, he estimated, and a contractor/installer made the changes in a day.

In a larger home, such changes might be too complex or expensive to do throughout, but at the very least, sellers should take a hard look at the front-door hardware that greets potential buyers, he said.

“I spent a lot of the money on the door hardware in that house because I do believe that your buyer knows within a few seconds whether they’re going to buy,” Somogyi said. “When you feel an expensive door handle vs. a cheap handle, you can feel the difference.

“I try to sell an emotional experience, that the place has been loved,” said Somogyi, an agent for the North Clybourn Group brokerage in Chicago. “That energy comes out.”

Although he’s a fan of dark-toned finishes (and certain antique golds), Somogyi said the general homebuying public continues to accept the recently popular satin-nickel tones as being “up to date” — though he suspects an appetite is brewing for the next big color.

“Lighting fixture (and hardware) finishes have certainly trended away from polished brass over the years,” said Jody De Vine, director of marketing for Sea Gull Lighting in Riverside, N.J.

We’ve seen more transitional styling and finishes that cross over between traditional and modern. This became quite evident in the use of polished and brushed nickel.”

De Vine said chrome finishes have gained popularity as a “clean” style, and that dark browns and iron-blacks come across as cozy and work well in updating traditional styling. Those browns and blacks also seem to be a popular choice when trying to deformalize some rooms, she said.

Somogyi said not to overlook hardware details because buyers notice them.

“Those switch plates and outlet covers that have crusty paint on them? They only take a minute or two to switch out,” he said.

And if you have recessed can-lights in ceilings, take a look at the “surround,” or collar, around the openings, he said. “Over time they get to be a yellow-y color that stamps them as being dated, dreary or old. I’ve seen a million of these.”

Article Source: http://www.inman.com/buyers-sellers/columnists/maryumberger/those-brass-light-fixtures-send-a-message-buyers-c-h-e-a-p?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+inmannews+%28Inman+News+-+Headlines%29

Article by: Josh Garskof for CNNMoney

(MONEY Magazine) — You don’t have to be underwater on your mortgage to feel trapped in your home.

Now may be a less than ideal time to put a house on the market or to take on big debt — icing your plans to trade up or build an addition anytime soon. But that doesn’t mean you’re stuck living in an uncomfortable home.

For a few hundred to a few thousand dollars, you can make your place “live” bigger without actually making it bigger, says architect Sarah Susanka, a small-space specialist and author of “Not So Big Remodeling.”

Call it thinking inside the box; here are nine creative solutions for cramped homes.

1. Multitask the dining room …

Cost: $500 to $2,000

If you have an eat-in kitchen, your dining room is probably used for special occasions only.

“Why have a prime spot sit vacant except for two or three holidays a year?” says Susanka.

Use it every day as an office or homework room without giving up dinner-party capabilities. Install doors ($300 to $500 each, with labor); add shelves or a cabinet for supplies; and invest in fitted pads to protect the tabletop.

For more flexibility, try a table like homedecorator.com’s $629 Mission Table Cabinet, a sideboard that — amazingly — telescopes into a full-size dining table.

2. … and the guest room

Cost: $100 to $3,000

Stop dedicating a whole room to infrequent out-of-town visitors.

With a decent air mattress, futon, or pull-out couch, you can lose the spare bed and use the room for day-to-day needs. (If you go with an air mattress, make sure to choose one with a built-in reversible motor to simplify the inflating and deflating.)

Add furniture, and what was only a guest room can double as a media or game room or home office.

3. Add a powder room

Cost: $3,000 to $6,000

Adding a first-floor powder room is simple if you have an unfinished basement or crawlspace for running the new pipes. Look for an existing room — a coat closet, say — and you won’t have to build walls.

To save more, forgo the tile. The minimum space required by code is typically 2½ by 4½ feet, but you can often get an exemption to go even smaller.

4. Build a home office closet

Cost: $100 to $3,000

If your family is already bursting the seams of your abode, a home office might seem out of the question. But every household needs at least a small desk for paying bills and to anchor a wireless Internet system — and you can often fit it all in a closet or armoire.

At its simplest, all you need are five or six deep, sturdy shelves made from wood or a composite product, which can total less than $40 at a home center. In a closet, set the lowest shelf at 30 inches high so you can wheel up a chair.

5. Bring the laundry upstairs

Cost: $5,000 to $7,000

Hiking up and down the stairs with laundry is enough to make anyone wish she could trade up. Instead, just move the machines.

Today’s full-size high-efficiency washers and dryers are all designed to stack. You can steal the space — a little more than four square feet — from a closet, hallway, or nook.

You’ll need to run new pipes and wiring, so being near an existing bathroom helps keep costs down, says Raleigh, N.C., architect Tina Govan. Make sure to include a drain pan to collect overflows or spills.

6. Open the floor plan

Cost: $2,000 to $4,000

A choppy layout of undersize rooms can make any house feel claustrophobic.

“People like the look of older homes, but not the way they function,” says Seattle architect Thomas Lawrence.

To open your floor plan without major expense, remove doors from rooms that don’t need them. Interior walls can come out for $2,000 to $4,000, unless they support the building or contain pipes — in which case a window or pass-through may be a more feasible solution.

7. Use built-ins to replace a closet

Cost: $4,500 to $6,000

If you choose to eliminate a closet to expand or enhance your living space, create some built-ins to get back the lost storage. A run of four- to 10-inch-deep shelving along a wall has almost no effect on the size of a room, says Corvalis, Ore., architect Lori Stephens.

And it can handle many times the capacity of a closet. You might spend $4,000 removing the closet and another $2,000 on new built-in cabinetry, or just $500 if you use assemble-it-yourself home-center cabinetry, such as the Billy collection from Ikea.

8. Build a bump-out

Cost: $6,000 to $12,000

Another trick to expand a home without a full-blown addition is called a bump-out. You hang extra space off the side of the house, sort of like an oversize bay window.

Structurally, it can’t extend more than about three feet from the existing exterior wall, but it can run nearly the whole length of the building — enough space to add an eating area to your kitchen or a closet to your master bedroom suite.

Because there’s no foundation work, a bump-out costs about $150 a square foot — or just $100 if you can tuck it under an existing roof overhang.

9. Finish non-living spaces

Cost: $15,000 to $30,000

Converting a full-height basement or garage into living space gets you an addition at half price. You’ll need a floor, ceiling, walls and more, but no structural work, no foundation, and no roof, so it’ll cost $50 to $100 a square foot — vs. about $200 for a true addition.

Attics are fair game, too, but more complicated because you may need to add a stairway and probably extend the plumbing, heating, and cooling systems a flight up. Doing all that brings the cost to around $150 a square foot.

Article Source: http://money.cnn.com/2012/01/20/real_estate/home_remodeling.moneymag/index.htm

Article by: RISMedia

Low interest rates, as we all know, are making history. Last week, according to an article found on CNNMoney, “rates on both the 30-year and 15-year fixed loans fell to new records, at 3.89 percent and 3.16 percent, respectively, according to Freddie Mac.” The question, though, is how long will prospective buyers enjoy such low rates?

Even with these rates, sales are still sluggish, with the market flooded with family homes and investment properties. Doug Duncan, chief economist for Fannie Mae, suggests that “low and declining interest rates may cause homebuyers to hesitate: They may expect them to fall even further. On the other hand, rising rates, which often accompany an improving economy, can give potential homebuyers a reason to act—before rates and prices become less affordable.”

Potential buyers sitting on the fence waiting for the rates to go lower may be getting their reason to act: a recent action by Congress may be pushing those rates higher shortly. According to CNNMoney, “to pay for the extension of payroll tax cuts, Congress mandated an increase in fees for Fannie Mae and Freddie Mac loans. That could mean an increase in upfront costs for borrowers of about half a point, starting April 1. The new fee would add $500 for every $100,000 in principal.” Instead of an additional upfront fee, “borrowers could pay the fee as a higher interest rate, [adding] an additional one-eighth of a point to their rate,” according to Keith Gumbinger of HSH Associates. That amount might seem inconsequential, but when added to a $250,000 mortgage, the mortgagee could be paying approximately $225 more per year.

Andrea Szlavik of Prudential Fox and Roach in Collegeville states that “with a market filled with desirable listings, interest rates at historic lows, and a threat of rising rates, prospective buyers would benefit from getting off the fence and jumping into the present day ‘buyers’ market.’”

Article Source: http://rismedia.com/2012-01-29/take-advantage-of-record-low-rates-before-they-rise/

Changes announced Friday to the administration’s Home Affordable Modification Program (HAMP) are expected to extend relief to a larger share of struggling homeowners as well as renters, according to federal officials.

One of the key adjustments to the program centers around principal reductions. HAMP currently includes an option for servicers to provide underwater homeowners who are struggling with their payments with a modification that includes a principal writedown.

To encourage investors to agree to principal reduction modifications, Treasury is tripling the incentives for such restructurings, paying from 18 to 63 cents on the dollar, depending on the degree of change in the loan-to-value (LTV) ratio.

The Federal Housing Finance Agency (FHFA) has prohibited Fannie Mae and Freddie Mac from employing HAMP’s principal reducing option for their borrowers. Treasury has notified FHFA that it will pay these same principal reduction incentives to Fannie and Freddie if they allow servicers to forgive principal in conjunction with a HAMP modification.

FHFA issued a statement in response noting that it recently released analysis concluding principal forgiveness does not offer any greater benefits than principal forbearance as a loss mitigation tool.

But the agency says it will reassess the investor incentives now being offered, taking into consideration the number of eligible loans, operational costs to implement such changes, and the potential effects of incentivizing borrowers to remain current.

Among the other changes announced, borrowers who are struggling because of debt beyond their mortgages, such as second liens and medical bills, will be eligible for an alternative program evaluation with more flexible debt-to-income criteria.

In addition, Treasury will expand eligibility to include investor properties that are currently occupied by a tenant as well as vacant properties slated for rental use.

Tim Massad, Treasury’s assistant secretary for financial stability says single-family homes serve an important function as affordable rental housing, and foreclosure of investor-owned homes has disproportionate negative effects on low- and moderate-income renters, as well as communities.

The deadline for HAMP will be extended for an additional year through December 31, 2013.

To date, HAMP has helped approximately 900,000 struggling homeowners permanently modify their mortgage loans, providing them with a median savings of more than $500 a month.

Massad says the administration is committed to a multi-pronged effort to support American homeowners and the housing market recovery.

In addition to foreclosure prevention initiatives such as HAMP, Massad says the federal government plans to focus on transitioning foreclosed properties into rental housing, making it possible for responsible homeowners to refinance, and providing hard-hit states with resources to develop targeted relief programs.

Article Source: http://www.dsnews.com/articles/administration-announces-changes-to-hamp-2012-01-27

For most people, their home is their single most valuable possession and their biggest investment. Homeowners insurance protects your investment as well as your family and your household possessions. If you suddenly lose your home due to fire or natural disaster, or the contents are damaged or stolen, you probably couldn’t afford to replace everything all at once. If you are sued because of injury or damage caused by you on your property, the cost of defending that suit could run into thousands of dollars in legal fees regardless of the outcome of the suit.

Most homeowner’s insurance policies have features that allow you to custom design a policy that’s right for you. Traditional homeowners programs offer protection for your home’s structures, protection for your personal property, and liability coverages.

Standard Homeowners Insurance Coverage

• Home Replacement Cost = Up to policy limits or other loss settlement clause

• Personal Property Replacement Cost = Optional

• Personal Property (contents) – % of Dwelling Coverage = 50 – 70%

• Additional Living Expenses – % of Dwelling Coverage = actual loss or up to 12 months depending on carrier

• Building Structures Not Attached – % of Dwelling Coverage = 10%

• Personal Injury Liability = Optional

• Business Property Off Premises = $250

• Business Property On Premises = $2,500

• Computers = Included for certain perils

• Debris Removal = Included with certain limits

• Fire Department Service Charges = $500

• Manuscripts = $1,000

• Money, Etc. = $200

• Theft of Firearms = $2,000

• Theft of Jewelry, Furs, Watches = $1,000

• Theft of Silverware and Goldware = $2,500

• Trees, Plant, Shrubs (up to $500 each) = 5% of Dwelling Coverage

• Watercraft and Trailers = $1,000

In addition to our standard homeowner’s insurance coverage, we offer a wide range of additional optional coverages that can be added to your policy. These coverages can enhance the protection of your home and personal property, as well as extend additional protections for liability and related risks. The list below outlines our standard policy and most common optional coverages.

We urge you to review the below optional endorsements. If the coverage does not appear on your Declarations Summary, it is not included in your policy.

Homeowners Insurance Coverage – Optional Endorsements

Extended Replacement Cost on Dwelling – This endorsement can be used to increase Coverage A (dwelling) by either 25% or 50 % to better accommodate a customer’s needs.

Replacement Cost on Personal Property – This endorsement protects the customer from receiving a depreciated value for their personal property. Instead, contents will be replaced with new items of like kind and quality.

Fire Alarm Credit – Policyholders may receive a discount for having protective items such as fire/burglar alarms and/or fire sprinkler systems.

Companion Policy Discount – For policyholders with current companion products, we offer a discount for their continued patronage.

Additional Limits of Liability – This endorsement provides additional Coverage A (dwelling) when a covered loss occurs and the cost to rebuild the dwelling exceeds the limit of liability. Then and only then, are coverages B, C and D increased by the same percentage.

Increase Wind & Hail Deductibles – By increasing the deductible for these types of losses, the policyholder may lower the cost of annual insurance premium. For example, increasing the regular $500 deductible to a $1000, 1% or 2% may decrease the annual premium significantly.

Increase Limits on Other Structures – Provides additional limits for Coverage B if needed. Only structures on the insured premises apply. You may increase up to double the original Coverage B amount.

Water Back up and Sump Overflow – Covers direct physical loss due to water backing up through sewers or drains and water which overflows from a sump. This is not a flood coverage, which requires a separate policy.

Increased Limits on Personal Property – This endorsement offers the insured the ability to increase certain personal property coverages from the standard homeowner’s limit. For example, a basic homeowner’s policy that insures jewelry may need additional coverage added to protect their investment.

Increased Limits on Business Property – For additional premium, this endorsement may increase the coverage for “business” property on the “residence premises”.

Scheduled Personal Property – For an additional premium, we offer open perils coverage for items such as jewelry, furs, cameras, musical instruments, silverware, fine arts, and golfer’s equipment. Not subject to a deductible, these items would be covered for the appraised value.

Special Computer Coverage – For an additional premium, this would broaden the coverage for your computer due to direct physical loss. For example, if the policyholder drops a glass of water on the computer, this would be covered. This endorsement is subject to the policy deductible.

Identity Theft – This endorsement is for expenses incurred by the insured as a direct result from identity theft.

Loss Assessment Coverage – Specially designed for condominium owners, this coverage provides protection for assessments made by a condominium association resulting from loss to the property. The policyholder can choose the limit of coverage they wish

Watercraft – This endorsement extends the limit of liability on your homeowner’s policy to your watercraft. This does not cover for the physical loss of the watercraft.

Personal Injury – With this endorsement, you can extend the limit of liability on your homeowner’s policy to cover you against libel, slander, wrongful eviction and invasion of privacy.

Additional endorsements and credits are subject to availability and qualification.

Booth Insurance Group is here to help with all your insurance needs. Please give us a call today for an insurance review.

Carmel Booth
770-905-0333

Basic Requirements for Homestead Exemption

• You must be a legal resident of the county.
• You must own and occupy the home as of January 1 of the year the homestead exemption is sought.

Deadline for Filing Homestead Exemption:

• In most counties, the application must be filed by March 1 of the year the exemption is sought, but some counties have a later deadline.
• In Fulton, DeKalb, Cobb and Gwinnett County the deadline is April 1st.

How Long will the Homestead Exemption Last?

• The homestead exemption will remain on the property until there is a change in ownership.

What is the Homestead Exemption Amount?

• These amounts are a reduction in what the amount that the taxed is based on.

As of January, 2012:

Fulton County:

• $30,000 for Atlanta/Fulton
• More Information

DeKalb County:

• Depends on whether a property tax assesment freeze had been applied for.
• More Information

Gwinnett County:

• $10,000 for the county taxes
• $4,000 off of the school
• $7,000 off recreation
• $2,000 off of the state
• More Information

Cobb County:

• $10,000

How Does this Affect my Bill?

• Example 2011 Cobb county property tax amounts:
• Market value: $100,000
• Taxable value (40% of market value): $40,000
• Less exemptions (assuming value): $10,000
• $30,000: Multiply by Millage Rate 0.03026. Property Tax: $907.80
• Without homestead exemption, the county property taxes would be $1,210.40

How do I File for the Homestead Exemption?

Please contact your County Tax Commissioner to determine the filing procedures in your county. Some counties require that you submit your application in person, while some have online filing procedures.

Fulton County       DeKalb County      Cherokee County

Article Source: McManamy |  McLeod |  Heller

Q: We bought a house this year! We put $33,000 down and the bank financed $28,000. Can I write this off on my 2011 taxes? How much of it?

A: First things first: Congratulations! You’ve become a homeowner, and seem to have done so using an enviable financial arrangement. But now that you own a home, you might need to shift the way you think and look at some things, including your taxes and other financial matters.

Owning a home is one of those landmarks that signify financial adulthood. And one of the things that responsible financial adults do is get professional help when the situation requires it. Taxes are one of those areas that often do warrant calling the pros in.

I’m not just shilling for the tax prep industry here, either: The ultimate aim of using a tax professional is to make sure you get every deduction, credit and other tax advantage for which you qualify, without jacking up your chances at triggering the universally dreaded Internal Revenue Service audit by claiming dubious deductions.

Your mortgage debt is fairly small, as was your home’s purchase price, though I don’t know whether they are large or small in the context of your overall financial picture (i.e., income, assets, investments, etc.).

The fact that you saved or somehow came up with such a sizable chunk of change to put down makes me hesitate to assume that your finances are as simple as your mortgage balance might otherwise lead me to believe.

So, it might be the case that you can easily handle your own taxes — in fact, it’s even possible that your real estate-related deductions won’t even outweigh the standard deductions, so that filing a simple form without even itemizing your deductions is actually the financially advantageous move.

Whether that’s the case cannot be determined in a vacuum — you may have other financial and tax issues going on. But with software and tax preparation services as inexpensive as they are, starting at under $20 for simple returns, I think it behooves you to get some professional advice and ensure you get the deductions you need.

Hiring a tax preparer might be a worthwhile investment to make, even if just this year, so he or she can brief you on what records you should keep and strategies you should do moving forward, like home repair and improvement receipts, or documentation of your use of an area of the home as a home office.

Now, let’s talk more substantively about the deductions that are available to you, in the event you do decide to itemize your taxes (IRS Publication 530 offers a more nuanced view into Tax Information for Homeowners):

1. Mortgage interest deduction. Assuming this home is your personal residence, 100 percent of the mortgage interest you owe and pay before Dec. 31, 2011, is deductible on your 2011 taxes. In January, your mortgage lender will send you a form documenting the precise amount of interest you paid, although most lenders also now make this form immediately available to borrowers online.

Chances are good that you paid some amount of advance interest on your home loan at closing — expect to see that on your statement from your lender, but you should also be able to find it on the HUD-1 settlement statement you received from your escrow agent at closing.

2. Property tax deductions. Again, assuming that this is the home you live in most of the time, you should be able to deduct 100 percent of the property taxes you’ve paid to your state and/or local taxing agency this year.

3. Closing-cost deductions. Discount points and origination fees paid to your mortgage lender and/or broker at closing are frequently deductible, but there are rules around this, which tax software and/or professionals can help you make sure you meet. Note that, according to Internal Revenue Service Publication 530, “You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home.”

There are various home improvements (especially those that increase your home’s energy efficiency), state and local tax credits for buying a foreclosure, and other tax advantages that might be available to you.

My advice is to work with an experienced, local tax preparer or, at the very least, use reputable tax preparation software to ensure that you get the maximum tax advantages available to you as a result of your new role as a homeowner.

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

Article Source: http://www.inman.com/buyers-sellers/columnists/taranichollenelsoninmancom/top-5-tax-breaks-homeowners

I think what we most appreciated was Melissa’s candor about our particular situation: our house’s pluses and minuses, and the state of the market at the moment. She has a knack for being a realist but with plenty of optimism so you don’t despair!

Melissa told us exactly what we had to do to prep our house for market and masterfully staged it to showcase what our house had to offer. She was spot on about the correct asking price. In less than a month, we had sold our house!

Thanks!
Melissa, Paul and family