Priscilla's Bronxville Real Estate Blog

News and insights on Bronxville real estate, buying, selling, and the Bronxville community.

Tips to Reduce the Hassle of Tax Time

Posted By Priscilla on April 8th, 2012
Posted in Tax Matters | No Comments »

Many Americans dread the approach of April 15, but there are ways to make it less “taxing”. The stress that’s often associated with tax season usually stems from disorganization. With the right planning, however, you can approach filing your taxes with a sense of order and control, which will result in accomplishing the task and receiving your refund check even sooner.

This year’s official tax due date is Tuesday, April 17, so there’s still plenty of time to collect and prepare the necessary documentation—usually the most time-consuming and overwhelming part of the filing process. Here are a few suggestions to help move things along and reduce stress:
•Get organized. Employers, banks and other institutions must send all tax documents by the end of January, so a checklist of documentation needed can help. Check off items as they arrive to easily determine which ones are still needed prior to starting the filing process.
•e-File. According to USA.gov, over 100 million people will electronically file their tax return this year. Tax software from companies such as Turbo Tax and H&R Block not only have easy-to-use e-file features, but also offer a number of additional benefits, including faster tax submissions and returns, increased accuracy, and greater security.
•Look for discounts. Taxpayers can save time and money by finding online offers and discounts on sites like DealTaker.com and Coupon Sherpa to purchase tax software programs, tax-related services, and office supplies.
•Access tax resources. Not everyone can e-file, so individuals need to know where to find all the necessary paperwork for a mailed return. Since the IRS no longer mails tax forms, taxpayers can visit www.irs.gov to download tax forms or visit a local library for printed copies.
•Ask questions. Some of the major tax companies offer free tax advice or access to professionals who can answer a variety of tax-related questions. Taxpayers should take advantage of these services to avoid paying more or filing incorrectly.
•Think ahead. Since tax filing is a yearly event, a little pre-planning for next year will go a long way toward reducing the stress and time associated with tax preparation. Visit office supply stores such as Staples, Office Max, and Office Depot to stock up on file folders, envelopes, shredders, and more to help organize receipts and other paperwork for 2012. Also consider using a finance management software such as Mint.com and Quicken to track income and expenses over the coming year.

Options for Replacing Your Kitchen Floor

Posted By Priscilla on March 25th, 2012
Posted in Real Estate Videos | No Comments »

http://www.youtube.com/watch?v=qmWpBEd2NPY&list=UUF7-KVEc_PW0RIv_XHWfNww&index=7&feature=plcp

Tips for How to Get the Best Home Improvement Estimate

Posted By Priscilla on March 25th, 2012
Posted in Real Estate Videos | No Comments »

http://www.youtube.com/watch?v=_We0qtXF8OE&list=UUF7-KVEc_PW0RIv_XHWfNww&index=8&feature=plcp

For Your Best Return on Home Improvements, Focus on the Exterior

Posted By Priscilla on March 25th, 2012
Posted in Real Estate Videos | No Comments »

It’s Never Too Late to Save for Retirement

Posted By Priscilla on March 20th, 2012
Posted in Priscilla's Articles | No Comments »

43 percent of Americans had less than $10,000 saved in 2010. Perhaps you’re one of them — or whatever you may have saved so far, you know it isn’t enough.

The good news is that it’s not too late and with the right planning, you can retire comfortably no matter what your age. According to retirement planning specialist Derrick Kinney of Derrick Kinney & Associates, never think that you’re too old to start saving for retirement. As he explains, the years between your 40s and 60s represent a timeframe when many of the financial obligations associated with raising a family have decreased, allowing you to put retirement savings into overdrive.

Kinney offers the following tips for speeding up the process:
•Create a detailed catch-up plan. Determining the amount of money you will need in retirement can be difficult. You must factor in the inflation rate, your retirement age, the longevity of your retirement and your expected expenses, including your increased medical costs. For obvious reasons, calculating retirement income can get complex fast, but there are online calculators that can provide an estimate. Plus, there are some widely accepted guidelines you can use as a baseline such as planning to live on 80 percent of your pre-retirement income. After you have determined the estimated amount of money you will need to save, use that number to create realistic, yearly goals.
•Redirect spending to build your savings. Since you are beginning to save later in life, Kinney recommends you save 20 percent of your salary each month. Take advantage of online budgeting websites and smartphone apps that connect to your accounts and track your spending to determine wasteful spending habits. Cut out these habits and redirect the money to your savings account. Also, consider automatically directing any raises you receive to your savings account. You can’t miss money you never touched.
•Invest wisely and max out your 401(k). After you have built up your savings, you will need to invest some of it to ensure future income. Yes, the market does fluctuate, says Kinney, but overall, it has a pretty good track record and still remains a good bet against fighting inflation. Begin investing by maxing out your contributions to your 401(k), 403(b) or IRA. Next, consider purchasing exchange traded funds (ETFs) or mutual funds. Make it a point to review your investments periodically to ensure they are performing to your expectations.
•Buy the appropriate insurance. Statistics show that nearly 2/3 of retirees will need long-term care either at home or through an assisted living facility and the cost can be upwards of $50,000 annually. To ensure skyrocketing medical costs won’t destroy their financial security, retirees should consider purchasing long-term care insurance as well as health insurance, says Kinney. It’s important to realize long-term care insurance does not cover the same day-to-day medical expenses that health insurance covers and if you retire at 59.5 you are on your own when it comes to providing health insurance. Retirees may also want to consider buying life insurance if they have dependents.
Following the above four steps can put anyone on the path to a more secure retirement, even if you’re in your 40s, 50s or 60s.

Owning a Home Essential to the American Dream, Survey Shows

Posted By Priscilla on March 20th, 2012
Posted in Bronxville Real Estate, Real Estate Trends | No Comments »

Not surprisingly, despite the ups and downs of the housing market, homeowners and non-owners alike consider owning a home essential to the American Dream, according to a new survey conducted by The National Association of Home Builders (NAHB).
The survey—conducted on behalf of the National Association of Home Builders (NAHB) by Public Opinion Strategies of Alexandria, Va., and Lake Research Partners of Washington, D.C.—polled 2,000 people who are likely to vote in 2012. According to NAHB Chairman Bob Nielsen, “The survey results show that Americans see beyond the immediate housing market to the enduring value of homeownership. An overwhelming 75 percent of the people who were polled said that owning a home is worth the risk of the fluctuations in the market, and 95 percent of the homeowners said they are happy with their decision to own a home.”

Despite the challenging real estate market, people who don’t currently own a home report they want to buy a house, says Neil Newhouse, a partner and co-founder of Public Opinion Strategies. Almost three-quarters of those who do not currently own a home, 73 percent, said owning a home is one of their goals. And among younger voters who are most likely to be in the market for a home in the next few years, the percentages are even higher.

Other notable survey results include:

• Homeownership and a retirement savings program are considered by voters to be their best investments.
• 80 percent of homeowners would advise a close friend or family member just starting out to buy a home.
• Saving for a downpayment and closing costs are the biggest barriers to homeownership.
• Americans believe that owning their own home is as important as being successful at their job or being able to pay for a family member’s education.

To view slides of the poll results, visit www.nahb.org/VoterPoll.

Tips to Effectively Negotiate A Real Estate Sale or Purchase

Posted By Priscilla on March 19th, 2012
Posted in Bronxville Real Estate, Buyer, Real Estate Trends, Resources, Seller | No Comments »

When the time comes to make and negotiate an offer, many home buyers and sellers get nervous. Being anxious about whether your offer will result in a purchase or sale is understandable, but it’s important to focus on the factors you can control.
For example, it is vital to have done your homework beforehand. Make sure you understand as much about the local market as possible, especially what comparable houses have sold for recently and how long homes are staying on the market. Have your financing up to date, whether it’s a pre-approval or verification of funds for a cash offer. An offer consists of price and terms, such as mortgage and any other contingencies, and a proposed closing date. What is included and what is excluded from the sale also needs to be spelled out.
A negotiation is a successful compromise. It helps to focus on points of agreement first (such as the closing date, what the contingencies will be and inclusions and exclusions), then move on to points where agreement still needs to be reached. How an offer is presented and communicated can make a world of difference and, if expressed as a proposal rather than an ultimatum, success is more likely.
Another helpful approach is for each party to try and see the transaction from the point of view of the other. For example, once the house goes on the market it becomes a commodity, but sellers can’t always be so detached. For their part, buyers are likely to respond to their initial emotional reaction to a house, and might need to revisit it a few times before making an offer. It also helps for buyers to know that only part of the transaction is buying the home. The other part is making it their own.

For the first two months of the year, the Bronxville Village market has seen a pick-up in activity versus the same period a year ago. We are now a market that is more balanced between buyers and sellers than any market we have seen since the Fall of 2008. Eight single family homes plus one townhouse sold between January 1, 2012 and March 11, 2012. During the same period last year, three single family homes plus one townhouse sold. Six co-op apartments had sold and closed by March 11, 2012, versus three during the same period last year. Median and average prices have also risen. Let’s hope this trend continues.

Momentum: How It Can Make or Break A Sale

Posted By Priscilla on March 19th, 2012
Posted in Bronxville Real Estate, Buyer, Real Estate Trends, Resources, Seller | No Comments »

As we enter the 2012 Spring Market, it helps to keep in mind that momentum is one of the factors which can make or break a transaction. Once an offer is made, the speed at which one side responds to the other is often taken as an indication of that party’s interest in moving the transaction forward, and vice versa. Sellers and buyers are sometimes not aware of this, are very busy with other things in their lives, and allow communication between the parties to lag.
Days may pass and the other party begins to wonder what is going on. In reality, there are a myriad of possibilities, but often the other side in the transaction perceives this as a lack of commitment. Buyers may start looking in another town, have second thoughts or may be wondering whether they have sufficient cash to complete renovations they see as necessary. Sellers may be entertaining other offers. Neither side communicates what is going on, but as time passes they not only begin to wonder, they become suspicious whether the other party’s level of interest remains high. They may second guess what the other party is up to and begin to second guess, often incorrectly, why their last communication hasn’t received a response. Suspicion and distrust can skew communication and cause parties to back away when more prompt responses would have avoided this. They can also cause the party feeling “neglected” to harden their position and be less willing to make any compromises that are needed for the transaction to come together.
The solution is to be well prepared before you put your house on the market – or before you seriously look for a house to buy. Then, once you decide to move forward, do so decisively, make it your priority, and make sure the responsiveness you demonstrate indicates to the other side that you continue to be motivated to move ahead. It’s fine to negotiate through several rounds of offers and counteroffers, just be mindful to keep the process moving. As in many other forums, good – and prompt – communication is the key to success.

There has been a feeling of recent pick-up in activity in the Bronxville Village real estate market, and the early 2012 data bears this out. There have even been “bidding wars” on a few single family homes in recent weeks. In mid-February were 32 single family homes on the market plus 11 townhouses. At year-end 2011, there were 23 single family homes and 4 townhouses on the market. Five single family homes and 1 townhouse were under conditional contract in mid-February; 4 single family homes and one townhouse under conditional contract at year-end. The sales of 5 single family homes and 2 townhouses were pending in mid-February versus 3 single family homes and 1 townhouse pending at year-end. The sales of 6 single family homes and 1 townhouse have closed since January 1, 2012. No condo apartments were active on the market at the mid-February point and there none were under contract or whose sale was pending. For co-ops in mid-February, there were 30 active on the market, 8 under conditional contract, 2 whose sales were pending and 5 whose sales had closed since the beginning of 2012, a very small increase over the year-end numbers for this category.
Mortgage interest rates have continued to fall fractionally since the beginning of the year. According to BankRate.com, for a 30 year conventional fixed-rate mortgage, they were at 3.85% versus 3.94% in early January. Fifteen year conventional fixed rate mortgages averaged 3.14% versus 3.28% in early January. Five year adjustable rate mortgages averaged 2.84% versus 2.88% in early January.*
The added vigor shown by the data for the first six weeks of 2012 is a positive omen for the Bronxville Village real estate market. We will continue to monitor, and hope, that this trend is sustained.

*Source of mortgage rates: BankRate.com

Americans Confidence in Housing and the Economy Rises

Posted By Priscilla on March 19th, 2012
Posted in Bronxville Real Estate, Real Estate Trends | No Comments »

After several years of understandable negativity toward the economy and the real estate market, a new survey shows that Americans’ concerns about key economic and housing issues are beginning to subside.

Fannie Mae’s February 2012 National Housing Survey shows that consumer attitudes have stabilized across most indicators—including personal finances, housing, and employment—compared to late summer and fall of 2011. The survey polls 1,003 Americans via telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts.

The survey shows that the most dramatic change revolves around the economy—35 percent of Americans now feel that the economy is on the right track, up 19 percentage points since November, and 57 percent think the economy is on the wrong track, down 18 percentage points since November.

Americans’ confidence about personal financial situations, household income, and household expenses, as well as attitudes about homeownership and renting is holding at steady levels. Also important to note, Americans’ concerns about losing their job in the next 12 months has stabilized since the late fall, with 76 percent of Americans saying they are not concerned in February 2012, compared to 70 percent in November 2011. Fannie Mae believes that the recent pick-up in the pace of hiring over the past few months is directly responsible for alleviating consumer concerns about unemployment.

Here are some additional highlights from this important survey:
•Only 12 percent of respondents believe that their personal financial situation will worsen in the next 12 months, a 3 percentage point drop from January and the lowest value in over a year.
•33 percent say their expenses have increased significantly over the past 12 months, a 3 percentage point decrease from last month and the lowest level in the past 12 months.
•28 percent of respondents expect home prices to increase over the next 12 months (consistent with last month), while 15 percent say they expect home prices to decline (down 1 percentage point since last month).
•10 percent of Americans say that mortgage rates will go down in the next 12 months, a 2 percentage point increase from last month.
•The percentage of respondents who say it is a good time to sell rose by 3 percentage points to 13 percent, the highest level in over a year.
•45 percent of respondents think that home rental prices will go up, a 2 percentage point increase from last month.
As rents continue to increase and more home sellers enter the market, the next few months represent a critical opportunity to purchase your first home or move up to your next home. Positive data like the above will quickly build momentum in the current housing market.

How to Handle Cancellation of Mortgage Debt on Your Tax Return

Posted By Priscilla on March 18th, 2012
Posted in Bronxville Real Estate, Real Estate Trends, Tax Matters | No Comments »

Linda Goold, Tax Counsel for the National Association of REALTORS® recently wrote an article for RISMedia’s Real Estate magazine advising consumers how to handle cancellation of mortgage debt on their tax returns. She offered some great information that is worthy of sharing.

According to Goold, in today’s market, a lender will sometimes forgive some portion of a borrower’s debt. The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower. Some exceptions to this rule exist and a law enacted in December 2007 provides relief to troubled borrowers when some portion of mortgage debt is forgiven. However, this relief expires on December 31, 2012. Goold provides the following general information you need to know about this law and cancellation of mortgage debt. Be sure to review this information with your accountant or personal tax advisor before filing this year’s tax return:

General Rule for Debt Forgiveness: If a lender forgives some or all of an individual’s debts, the general rule is that the forgiven amount is treated as ordinary income and the borrower must pay tax on the forgiven amount. Exceptions apply for bankruptcy, insolvency and certain other situations, including mortgage debt.

Current Law for Mortgage Debt (Jan. 1, 2007 through Dec. 31, 2012): A borrower can be excused from paying tax on forgiven mortgage debt. The debt must be secured by a principal residence and the total amount of the outstanding obligation may not exceed the original mortgage amount plus the cost of any improvements. The objective of the legislation was to assure fairness: Homeowners should not be required to pay income tax where there is no cash realized in a transaction.

Does the relief apply only to a sale? No. The provision has broader application. Lenders might forgive some portion of mortgage debt in a sale known as a short sale or in a foreclosure where the debt is wiped out. In addition, if a borrower still living in the home is able to make an arrangement with a lender that reduces the principal balance of a mortgage, the amount forgiven in that workout will not be taxed.

Can the homeowners in a short sale or foreclosure claim a loss? No. The loss is considered a personal loss and is therefore ineligible for either capital loss or ordinary loss treatment.

What happens to the seller when mortgage debt is forgiven? Until January 1, 2013, the homeowner will pay no tax on any forgiven amount. Under pre-2007 law, the amount of forgiven mortgage debt, would have been treated as income, and taxed at ordinary income rates.

Does this provision apply to a refinanced mortgage? Only in limited circumstances. The relief provision can apply to either an original or a refinanced mortgage. If the mortgage has been refinanced at any time, the relief is available only up to the amount of the original debt (plus the cost of any improvements). Thus, if the original mortgage was $125,000 and later refinanced in a cash-out arrangement for a debt totaling $140,000, the $15,000 cash-out is not eligible for relief if a lender later forgives some amount related to the cash-out. Tax relief is generally not available for second mortgages or home-equity lines of credit where the funds are not used for home improvement. Any amount that is not eligible for the relief provision will be taxed as ordinary income.

How does the homeowner get the correct information to the IRS? The lender is required to provide the homeowner and the IRS with a Form 1099 reflecting the amount of the forgiven debt. The borrower/homeowner must file a Form 982 to reflect the amount forgiven and to show the reason why the forgiven amount is not taxable. Any taxable portion of forgiven debt will then be reported on the homeowner’s Form 1040 for the tax year in which the debt was forgiven.

What if a property declines in value, but the owner stays in the house? The provision would not apply. The provision applies only at the time of sale or other disposition or when there is a workout (reduction of existing debt) with the lender. No mechanism exists to reflect a loss of value while the property is still being used as a residence.

Do all lenders forgive mortgage debt when property values decline or your are in foreclosure? No. Some states have laws that allow a lender to require a repayment arrangement, particularly if the borrower has other assets. Forgiveness of debt is always at the lender’s discretion.