Archive for January, 2009
Tax Matters…. Florida Homestead Exemption, Portability, and First Time Buyer Credit.
Jan 16th
Don’t forget to apply for Homestead Exemption! What is that Portability all about?? Do I really get $7500 tax credit on my first property purchase??
It is time to apply for Florida Homestead exemption! If you have already filed no need to do anything and this year we will see the benefit from the extra $25,000 homestead exemption in our 2008 taxes since it has been increased from $25,000 to $50,000 if the assessed value on your permanent residence is great than $75,001. This exemption will save most homeowners at least $250 a year in taxes. If you do not currrently have homestead exemption, now is the time to apply. To apply, simply gather 2 forms of proof of florida residence (ie driver’s license, tax return filed from FL, employment letter on letterhead) and any proof of ownership (ie warranty deed, property tax bill) and go down to the Stephen P. Clark Government Center by March 1, 2009 to file for 2008. Visit http://www.miamidade.gov/pa/exempt_homestead.asp for more information. If you are not eligiblefor homestead, there is now a 10% Assessment Cap for Non-Homestead Properties Effective Jan 2009! No application required.
Ok, many buyers who are moving to a more expensive home have questioned what this Portability or Transfer of Homestead Assessment Difference is all about. This went into effect for 2008. Maximum amount you can port is $500,000. Click here http://www.miamidade.gov/pa/tax_estimator/TaxEstimator.asp to reference more information and use the calculator to get an idea of savings if you are planning on moving to a more expensive property or less expensive home. Portability, along with lower home prices and great mortgage rates make this a great time to trade up in your same community if you are looking for more house!
The $7500 Homebuyer Tax credit (April 9, 2008-July 1, 2009) applies only to First time home buyers and is a tax credit of 10% of the purchase price up to $7,500. Note though this is a interest free loan and this loan must be paid back to IRS in 6.67% increments over the next 15 years.
I hope this helps you as you plan for 2009.
Best,
Jill
Price Reductions – What’s the Best Strategy
Jan 10th
We have all seen it a number of times in the Grove, a listing finally sells, after 2,5,7 or more small price cuts. This is an unpleasant scenario for a seller, leading to stress and most likely, a lower final sale price. But how can you avoid this unpleasant scenario in today’s troubled housing markets? The answer, experts suggest, is to put your home on the market at the right price, and if it doesn’t sell quickly, cut the price deep and fast, so you won’t be caught in a downward spiral of price reductions.
Few sellers want to hear that advice, so the best way to avoid it all together is to be realistic and open minded when initially listing your home. Have your Realtor prepare comprehensive market data on sale prices of comparable homes, and note the delta between the final sale and the initial listing price. Buyers in this market are well armed with market data, and are not going to take the bait. No one really wants to think that the value of their home has dropped considerably since the 2006-2007 high point, but overpricing is not the answer if you really need or want to sell your home. Testing the market simply isn’t a good strategy with home prices depressed, sales at a slower pace in many markets and buyers on the hunt for good deals.
It is no surprise that homeowners still cling to outdated beliefs about the value of their own home. I am sure the price of my home is not what I would hope it to be, but if I had to sell, I would certainly do my research to understand the best pricing strategy. A survey by real estate information Web site Zillow.com found that 62 percent of homeowners believed their home had appreciated or held steady in the past year, even though 77 percent of U.S. homes lost value during that period.”Our survey reveals a wide gap between the perception homeowners have about their own home’s value and the realities of a market in which three-quarters of homes declined in value in the past year. We attribute this gap to a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others, but not them,” says Stan Humphries, Zillow’s VP of data and analytics.
If your home has been on the market for several weeks without an accepted offer, you should probably review your pricing strategy, and balance that with the urgency you have to sell your home. Consider the following:
- Number of showings to prospective buyers.
- Foot-traffic at open houses.
- Offers (or lack of).
- Recent closed sales of comparable homes.
- Feedback from buyer’s agents and buyers.
If you are going to cut the price, it needs to be meaningful enough to “get the attention of the market again” A series of smaller cuts, rather than one big one, can result in a slower sale and lower price.
No one wants to make these hard decisions, so they do it in small increments, but the market demands the price, and in the end we usually end up selling at the same price, if not lower.
Best,
Jill