Thanks to James Williamson of Fairfield Mortgage for this summary of the Tax Credit program for 1st time home buyers*. To get in touch with James, click on the Fairfield Mortgage link in the upper left hand corner of my blog.
Time Is Running Out on the $7500 Tax Credit Created as part of the Housing and Economic Recovery Act of 2008, the tax credit was enacted in July of this year to encourage home buying. It is only temporary. Retroactive to homes bought on or after April 9, 2008, the tax credit will expire in July, 2009. Here are the nuts and bolts you need to know about the credit:
How does it work?
The tax credit is actually a 15 year interest-free loan where the buyer will repay 1/15th of the loan each year via a tax credit against any Federal income taxes owed. Thus, with a $7500 limit, the maximum payment each year would be $500. The repayment begins two years after the credit is taken. Furthermore, if the homeowner sells the home during the 15 year period, he/she has to repay the balance of the loan from the profit of the home sale (if there is insufficient profit, then the remaining payback would be forgiven).
What's so great about a tax credit?
A tax credit is more valuable than a tax deduction, but most people don't know there's even a difference. A tax credit reduces the actual amount of tax due. A tax deduction only reduces the amount of taxable income. For example, if your client owed $3,000 in taxes for 2008, but qualified for the full $7,500 tax credit, it would cancel the entire amount he owes and still leave $4,500 which he would receive as a tax refund!
*Who qualifies for the tax credit? The credit is for first-time home buyers as well as anyone who hasn't owned a home in the past three years that can meet the income requirements. Single taxpayers can claim the full credit with incomes up to $75,000 and married couples up to $150,000. This credit is available for owner-occupied U.S. properties.
How much is the tax credit? The tax credit goes up to 10% of the purchase price of a new or existing home up to a limit of $7,500.
Wednesday, October 15, 2008
Thursday, September 25, 2008
What's Wrong With My Carpet?
Mystery Solved! Bill Garwood, home inspector extraordinaire, writes a weekly article for the AJC. I get this question a lot when I'm helping home-owners get ready to sell. Thanks for clearing this up, Bill!
Ask the Inspector: Ghosting? It’s a dirty problem, but don’t let it spook you
Air circulation is culprit of mysterious carpet-stains.
By Bill Garwood
For the Atlanta Journal-Constitution
Sunday, September 21, 2008
If you have light-colored carpets in your home, you may have experienced dark areas along the baseboards or even under doors. Perhaps you have noticed dark spots on your bathroom ceiling above the vanity lights. You may have even noticed that there appear to be dark streaks on your walls or ceilings.
Don’t panic, these stains do not mean you are a poor housekeeper, although eliminating them may require a lifestyle change.
The stains are known as ghosting. For ghosting to occur there must be a source of dirt or soot in the house. In many cases the dirt or soot simply enters the house from outside.
Since most houses experience some imbalance of pressures between the interior and exterior, a negative interior pressure will naturally draw dirt into the house through windows, doors or any other crack in the envelope of the house. Dirt and soot can also be created by the occupants of a house. Cigarette smoking, burning candles or incense, and the pilot lights on gas burning appliances all produce a certain amount of soot.
The most common area of ghosting is on light-colored carpets. In this case, an imbalance of pressures between the interior and exterior of the house results in an imperceptible airflow through walls. The air carries some of the dirt and soot with it.
When the air passes into or out of the bottom of a wall, the carpet acts like a filter and catches the dirt and soot resulting in the dark areas. Imbalances or even poor design of a heating and cooling system can result in air pressure differences between rooms and the areas outside them.
When this pressure imbalance occurs, air passes under the doors and is captured by the carpet. Streaking on walls typically occurs on exterior walls and is a result of a difference in temperature between the wall studs and the spaces between the studs.
In winter the wood studs will tend to be colder than the insulated spaces between them. This minor difference in temperature allows some imperceptible condensation of water vapor along the stud. This condensed water vapor traps the soot and dirt particles, leaving relatively dark, dirty streaks on the wall.
In bathroom ceilings the cause of ghosting is a little simpler. The heated air from the lights over the sink rises and carries the dirt and soot in the air with it. The dirt and soot collect on the ceiling above the lights.
Cleaning tips
Ghosting can be difficult to get rid of. It may require replacement of carpets and/or repainting of walls and ceilings. For less severe ghosting on carpets, a professional deep cleaning of the stains using an enzyme-based powder has been somewhat successful.
The following is a list of things that a homeowner can do to help minimize or eliminate ghosting:
Ask the Inspector: Ghosting? It’s a dirty problem, but don’t let it spook you
Air circulation is culprit of mysterious carpet-stains.
By Bill Garwood
For the Atlanta Journal-Constitution
Sunday, September 21, 2008
If you have light-colored carpets in your home, you may have experienced dark areas along the baseboards or even under doors. Perhaps you have noticed dark spots on your bathroom ceiling above the vanity lights. You may have even noticed that there appear to be dark streaks on your walls or ceilings.
Don’t panic, these stains do not mean you are a poor housekeeper, although eliminating them may require a lifestyle change.
The stains are known as ghosting. For ghosting to occur there must be a source of dirt or soot in the house. In many cases the dirt or soot simply enters the house from outside.
Since most houses experience some imbalance of pressures between the interior and exterior, a negative interior pressure will naturally draw dirt into the house through windows, doors or any other crack in the envelope of the house. Dirt and soot can also be created by the occupants of a house. Cigarette smoking, burning candles or incense, and the pilot lights on gas burning appliances all produce a certain amount of soot.
The most common area of ghosting is on light-colored carpets. In this case, an imbalance of pressures between the interior and exterior of the house results in an imperceptible airflow through walls. The air carries some of the dirt and soot with it.
When the air passes into or out of the bottom of a wall, the carpet acts like a filter and catches the dirt and soot resulting in the dark areas. Imbalances or even poor design of a heating and cooling system can result in air pressure differences between rooms and the areas outside them.
When this pressure imbalance occurs, air passes under the doors and is captured by the carpet. Streaking on walls typically occurs on exterior walls and is a result of a difference in temperature between the wall studs and the spaces between the studs.
In winter the wood studs will tend to be colder than the insulated spaces between them. This minor difference in temperature allows some imperceptible condensation of water vapor along the stud. This condensed water vapor traps the soot and dirt particles, leaving relatively dark, dirty streaks on the wall.
In bathroom ceilings the cause of ghosting is a little simpler. The heated air from the lights over the sink rises and carries the dirt and soot in the air with it. The dirt and soot collect on the ceiling above the lights.
Cleaning tips
Ghosting can be difficult to get rid of. It may require replacement of carpets and/or repainting of walls and ceilings. For less severe ghosting on carpets, a professional deep cleaning of the stains using an enzyme-based powder has been somewhat successful.
The following is a list of things that a homeowner can do to help minimize or eliminate ghosting:
- Eliminate or reduce tobacco smoking in your house.
- Eliminate or reduce candle burning in the house.
- Have pilot lights on furnaces, water heaters and gas logs properly adjusted by a licensed heating and cooling contractor.
- Replace your furnace filters regularly. Every couple of months is advisable.
- Clean and vacuum regularly using a crevice tool to clean around baseboards.
- Check your vacuum cleaner. If it is not clean, it may produce more dirt than it collects.
- Have your heating duct system professionally inspected to ensure against leaks.
- Undercut doors to allow passage of more air under them.
- Properly weather-strip doors between the house and the garage.
- Pull back carpets and caulk the gap between the floor and the baseboards.
- Consider installing darker carpets that will show the ghosting less.
Tuesday, September 16, 2008
When is Electronics Recycling Day?
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Monday, August 18, 2008
I'm going to try to sell it myself. Any advice?
You bet I do! Why would I give you free advice to sell your home without me? I'm nice to a fault. That, plus, if you give it your very best shot and you still can't sell it on your own, you should call the agent who tried to help you out, don't you think?
Okay, quickly,
1. Don't just put a sign in the yard, get online - craigslist, AJC, Creative Loafing, etc.
2. Be ready to work with a buyer's agent. Go ahead and put in your ad that you'll pay a buyer's agent's commission, that's the best way to get serious buyers in the door.
3. Keep your ad short and sweet - no one is going to read about your wall paper, how big each closet is, or how great the schools are. They already know about the schools, I assure you. And if the hard numbers look right - # of beds, # of baths, and price - then they will probably want to see your house. Don't waste time or money on lots of words.
4. Act quickly - the market is changing so fast that even full time professionals have to work to keep up with things. If you don't have any serious lookers in the first 35 days, you need to re-think either your price or your willingness to work with an agent.
Okay, quickly,
1. Don't just put a sign in the yard, get online - craigslist, AJC, Creative Loafing, etc.
2. Be ready to work with a buyer's agent. Go ahead and put in your ad that you'll pay a buyer's agent's commission, that's the best way to get serious buyers in the door.
3. Keep your ad short and sweet - no one is going to read about your wall paper, how big each closet is, or how great the schools are. They already know about the schools, I assure you. And if the hard numbers look right - # of beds, # of baths, and price - then they will probably want to see your house. Don't waste time or money on lots of words.
4. Act quickly - the market is changing so fast that even full time professionals have to work to keep up with things. If you don't have any serious lookers in the first 35 days, you need to re-think either your price or your willingness to work with an agent.
Friday, August 1, 2008
Should I try to sell on my own?
Maybe. I get so many questions about whether or not people should try to sell their home themselves. The most honest answer is, maybe. Since home values are down a bit from last year, seller's are hoping to make up the difference by not paying a real estate commission. I can see the logic in that. But, the other side of that coin is that you can't save the money if you can't sell the house. Here's a great response to that question from John Adams, who writes a weekly column in the AJC.
Selling your home 'by owner' can make sense — if you have time
By John Adams
Inside Advice
Published on: 07/15/07
Two weeks ago, we talked about why most home sellers are best served by working with a real estate professional. That doesn't mean you have to pay a full traditional commission. But it is a recognition that there's a lot of work to be done between putting up a "for sale" sign and sitting down at the closing table.
The reality is this: most sellers are not willing to take on all the necessary tasks required to complete a successful sale. Nor are they able to attract qualified buyers and keep them interested long enough to encourage a satisfactory offer in the first place.
However, if your circumstances are different, you might want to consider selling your home yourself:
• If you have sold homes yourself in the past and know what it takes to get the job done. I once sold a home in Dunwoody to a relocating IBM executive. He told me he would be transferred again within five years. I stayed in touch, hoping to get the listing when his next move occurred. Instead, I was disappointed when I saw a "for sale by owner" sign.
He told me that he had six months' notice on his move, and that he had sold four of his previous five homes, with considerable dollar savings each time. He already had a real estate attorney standing by to assist if needed, and he had plenty of time to test the waters.
I had to admit he was an experienced seller who stood a reasonable chance of saving more than $20,000 in commission dollars.
• If you live in a hot neighborhood and are in no hurry to sell. Smart homeowners keep up with homes that are "on the market" and "sold" in their neighborhood. For all you know, you have a neighbor who drives by your house twice each day and says to himself, "If that house ever comes on the market, I'm going to buy it, no matter what it costs!"
• If you don't mind taking on some or all of the work of marketing the house yourself, and have plenty of time to sell. Thirty years ago, there were full-service real estate agencies, and nothing else. Everybody pretty much charged the same commission, which was most often 7 percent of the selling price.
Today, things have changed. Full-service agencies still have an important role to play, but they are under increasing pressure to justify their commissions. And those commissions are, as often as not, negotiated to reflect the arrangement between the seller and the broker involved.
In addition, there are dozens of so-called "discount brokers" who offer a variety of services, ranging from staging your home for maximum visual appeal to holding open houses, if you wish. Most offer to include your home in the local multiple listing service. Most also include the ministerial function of filling out the contract forms and answering basic questions during negotiations with the buyer.
You may have noticed that in the three scenarios I mention, I have included the qualifier that you have plenty of time to sell. That's because the business of selling real estate "by owner" can take a long time. And you probably aren't going to get a full exposure to the largest possible pool of prospects unless and until you find a way to get your home listed in the local multiple listing service.
My advice is to attempt the "by owner" approach only if you have at least six months before you need to have your home sold and closed. That way, if you are successful, you will likely have saved some commission dollars. Most important, your home will be sold and closed.
If, on the other hand, you try it "by owner" and the house doesn't sell in two months, you will still have at least 120 days for a real estate professional to give it everything they've got, with all the marketing tools money can buy.
Selling your home 'by owner' can make sense — if you have time
By John Adams
Inside Advice
Published on: 07/15/07
Two weeks ago, we talked about why most home sellers are best served by working with a real estate professional. That doesn't mean you have to pay a full traditional commission. But it is a recognition that there's a lot of work to be done between putting up a "for sale" sign and sitting down at the closing table.
The reality is this: most sellers are not willing to take on all the necessary tasks required to complete a successful sale. Nor are they able to attract qualified buyers and keep them interested long enough to encourage a satisfactory offer in the first place.
However, if your circumstances are different, you might want to consider selling your home yourself:
• If you have sold homes yourself in the past and know what it takes to get the job done. I once sold a home in Dunwoody to a relocating IBM executive. He told me he would be transferred again within five years. I stayed in touch, hoping to get the listing when his next move occurred. Instead, I was disappointed when I saw a "for sale by owner" sign.
He told me that he had six months' notice on his move, and that he had sold four of his previous five homes, with considerable dollar savings each time. He already had a real estate attorney standing by to assist if needed, and he had plenty of time to test the waters.
I had to admit he was an experienced seller who stood a reasonable chance of saving more than $20,000 in commission dollars.
• If you live in a hot neighborhood and are in no hurry to sell. Smart homeowners keep up with homes that are "on the market" and "sold" in their neighborhood. For all you know, you have a neighbor who drives by your house twice each day and says to himself, "If that house ever comes on the market, I'm going to buy it, no matter what it costs!"
• If you don't mind taking on some or all of the work of marketing the house yourself, and have plenty of time to sell. Thirty years ago, there were full-service real estate agencies, and nothing else. Everybody pretty much charged the same commission, which was most often 7 percent of the selling price.
Today, things have changed. Full-service agencies still have an important role to play, but they are under increasing pressure to justify their commissions. And those commissions are, as often as not, negotiated to reflect the arrangement between the seller and the broker involved.
In addition, there are dozens of so-called "discount brokers" who offer a variety of services, ranging from staging your home for maximum visual appeal to holding open houses, if you wish. Most offer to include your home in the local multiple listing service. Most also include the ministerial function of filling out the contract forms and answering basic questions during negotiations with the buyer.
You may have noticed that in the three scenarios I mention, I have included the qualifier that you have plenty of time to sell. That's because the business of selling real estate "by owner" can take a long time. And you probably aren't going to get a full exposure to the largest possible pool of prospects unless and until you find a way to get your home listed in the local multiple listing service.
My advice is to attempt the "by owner" approach only if you have at least six months before you need to have your home sold and closed. That way, if you are successful, you will likely have saved some commission dollars. Most important, your home will be sold and closed.
If, on the other hand, you try it "by owner" and the house doesn't sell in two months, you will still have at least 120 days for a real estate professional to give it everything they've got, with all the marketing tools money can buy.
Tuesday, July 15, 2008
Where should I search for my new home?
There are a lot of search engines out there. Some are better than others. My new favorite for non-agents is www.frontdoor.com. It's part of the HGTV empire, but that's not why I like. It is fast, easy to navigate, uploads most of the available pictures, has maps of all the properties that you search for, and looks clean and streamlined. I recommend it.
Wednesday, July 2, 2008
How should I update my kitchen?
Cabinets Unhinged
By Marni Jameson
If I had to do it over (that line could open half my columns), I'd rethink my cabinet hardware. Until this past week, I hadn't given this hardware much thought. I liked my kitchen cabinets, which are only four years old. The drawers glide smoothly like Michelle Kwan, and the door hinges feel sturdy as firemen. But recently two events conspired to change my affections.
One, I visited my friend's new home, which she and her husband spent three years designing and building. A kitchen diva, Laurie cooks and entertains like an Oscar-party caterer, so I knew her kitchen would be, err, top drawer (sorry). Two, I received a preview of The New Yankee Workshop's nine-week kitchen makeover special, where the plaid-shirted Norm Abram, that carpenter who can build a log cabin out of an abandoned beaver dam, outfits a tired old kitchen with smart new cabinetry. Suddenly, my hardware seemed out of date, second rate and wholly inadequate, the way parents of college graduates feel.
When I get to Laurie's house, she's cooking dinner for her 16-year-old son and 24 of his friends. I pitch in to assemble five pans of vegetarian lasagna, two vats of Caesar salad, and three trays of garlic bread. As she dredges eggplant and stirs a gallon pot of bichamel (a word that in my recipe book means turn the page or order pizza), I snoop.
Her kitchen is enormous, but my obsession isn't with size, but with drawers. I pull one open, swoosh. It's fastidiously organized with compartments like a tackle box. I look it over.
"Where is it?" I ask.
"Where's what?" She must wonder why my head is under her drawer.
"The hardware." There's no drawer orthodontia cluttering the sides, waiting to catch crumbs and grease.
She shrugs. "Does the lasagna need more cheese?"
Then I meet the invisible hand. With a tap, the drawer slides to an inch of closing, then stops as if it hit a cotton ball. Just as I'm ready to push it again, a vacuum-like force sucks the drawer silently, firmly shut. I scream and jump back.
I holler to Laurie as if I'm the one who's discovered it: "Watch this!" I open a drawer and shut it, harder. It slows to a controlled stop, then swoosh, sucks closed. I need to tie a strap under my jaw to keep it from falling in the lasagna. "How does it know?"
"Uhh, when you're done, could you toss salad?"
When dinner's ready, the teenagers come through like locusts. Once they've gone, and we've cleaned up, Laurie offers coffee. "What kind do you want?" she asks.
"Whatever you're having."
"No, seriously, you can have whatever you want." She shows me her built-in Miele espresso machine. The appliance has cartridge slots for five kinds of coffee, ranging in octane levels from hair-on-your-chest strong to why-bother decaf. Pick your strength, and it brews espresso, latte or drip by the cup.
I shake my head. "Is this Jane Jetson's kitchen or yours?"
Laurie slides open a drawer built under the coffee maker. In it are not just mugs, warm mugs, because this isn't just a drawer; it's a mug warming drawer.
The longer I stay, the more unfaithful I feel toward my own comparatively modest kitchen. I was falling in love. That's the inevitable risk of home improvement. However up to date you make your kitchen, advancing technology sits on the verge making it as outdated as the wood-burning stove. Still, knowing that, if I had to do it over, I'd rethink the hardware, and I'd add that warming drawer.
I became even more smitten with high-tech kitchen gadgetry when I returned home and previewed The New Yankee Workshop kitchen series, airing this month and next on PBS. After watching it, I called Abram to uncover a few more secrets and trends:
- Design with your stuff in mind. Kitchen designers use several methods to customize kitchens. Using a string test, they tie a string to someone and trace her steps as she cooks. Then they design a cabinet plan that saves footsteps. The heap method involves putting all your kitchen stuff in a pile, and then designing cabinets to accommodate it, which beats making what you have fit given cabinets. Laurie took pictures of her kitchen supplies while they were in the cabinets of her former home, then made sure her new kitchen had a place for everything and more. The owner of the kitchen Abram was remodeling had 14-inch plates; standard upper cabinets are 12-inches deep. "Simple," Abram said. "We made the cabinet deeper."
- Don't skimp on the hardware. Typically, hardware comes rated for two kinds of loads: carrying ability and shock capacity. (Can your kid jump on it?) The higher the load the better. Both Laurie and Norm used hardware from Blum.
- Trade doors for drawers. Thanks to better hardware, cabinets with fixed shelves are giving way to cabinets with pullout shelves or drawers. Laurie's kitchen has upper cabinets, but for lower storage she has primarily drawers. She will never again rummage in the back of a cabinet for a pot.
- Bring dead corners to life. Corner cabinets often become black holes; things go in but never return. New cabinet designs fix that. Drawers have fronts built at a 90-degree angle that pull open to reveal full drawers. Doors open on elbow hinges, revealing shelves that turn like Lazy Susans.
- Replace don't retrofit. Putting new hardware on old cabinets is expensive, difficult and usually not worth it. "If you're ready to replace the hardware, you're getting close to the idea of new cabinets," said Abram.
Marni Jameson is a nationally syndicated columnist and author of "The House Always Wins" (Da Capo). You can learn more about her and her book - which can be a nice housewarming gift or a tool to show buyers some great ideas on turning a house that isn't quite right into perfect, at www.marnijameson.com.
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