Tax Deductions Sellers Won’t Want 

to Miss

Learn which tax benefits you can take advantage of when selling your home. - 

when you sell a home and make a profit of less than $250,000 (or less than 

$500,000 when you file a joint return with your spouse).If you meet those

 qualifications,and if you have lived in that home for two of the five years before 

you sell, the IRS doesn’t want to hear about your home sale because the profit

 you make is excluded from being taxed under U.S. Code 121. 

And now for the deductions …

 The IRS grants some tax deductions for home sellers.

 Getting the deductions requires that you itemize your taxes, 

admittedly a tedious job, but one that is probably worth your while. 

Here are five tax deductions you should take for 2014.

1. Selling costs

If you don’t qualify for the 121 exclusion, you will owe taxes on any 

profit, so make sure you deduct all your selling costs from your gain.

You can deduct the following:

• Your real estate agent’s commission
• Legal fees
• Title insurance
• Inspection fees
• Advertising costs
• Escrow fees
• Legal fees

And there’s another consideration. You might qualify for a partial 

exclusion if you sell your home due to circumstances involving divorce, 

change in employment, change in health, or other unforeseen

 circumstances.

2. Moving deduction

If you have to sell your house because you’re relocating for work, you might be able to deduct some of your moving expenses, Deductions could include transportation costs, travel to the new place, storage costs, and lodging costs.

3. Property tax deduction

You can deduct your property taxes for the portion of the year that you 

owned the home. Deduct the taxes up to, but not including the date of 

the sale, according to the IRS. The buyer pays beginning from the sale date.

4. Home improvements

It’s a sad fact that you sometimes need to improve your home — 

not for your own benefit and enjoyment — but for the home’s future 

owners. If you make home improvements that help sell your home, and

 if they are made within 90 days of the closing, they are considered 

selling costs, which are deductible, according to Dr. Goodwin.

5. Points

If you paid points to lower your interest rate when you refinanced 

your home, you might qualify for an additional deduction.

Because you can deduct a proportional share of the points until the 

loan is paid, when you pay off the loan through a sale, you can 

deduct the remaining value of those points.

Report: Buying a Home Twice as Affordable as Renting

Author: Tory Barringer in Daily Dose, Data, Featured, News December 9, 2014 Share on facebookShare on twitterShare on google_plusone_shareShare on linkedinSharing Services15

As home prices continue to grow and housing affordability diminishes, a new report maintains that the cost of buying a home is still only about half the cost of renting.

Looking at trends in incomes, home values, and rental prices in the third quarter, Zillowestimates that U.S. homeowners spend on average 15.3 percent of their income on monthly mortgage payments. For younger homebuyers, who typically make smaller down payments, that figure is only slightly higher: 17.4 percent.

"Homes for younger buyers remain affordable thanks to continued low mortgage interest rates and their tendency to shop for less expensive homes," Zillow said in its latest home value report.

Renters, meanwhile, are spending 29.9 percent of their monthly income on their living space as rent growth outpaces home prices nationally. According to a recent forecast from the company, rental costs are expected to rise 3.5 percent annually in 2015 compared to growth of 2.5 percent for home values.

While continually rising rents might be expected to drive more Americans into purchasing homes, they're also making it difficult for renters to save up for a down payment. In a recent survey, Freddie Mac found that 61 percent of current renters don't expect to buy a home in the next three years, with half of respondents saying they can't afford to save for the initial costs.

"Despite rising home values, homeownership remains very accessible for buyers that can scrape together a down payment—even if that down payment is relatively modest—find a home to buy and secure financing," said Dr. Stan Humphries, chief economist at Zillow. "But what keeps me up at night is the fact that it still remains so difficult for so many potential buyers to make those particular stars align, largely because renting is so unaffordable these days."

While current conditions might be tough for the hopeful would-be homeowner, Humphries reiterated his belief that increased inventory and slowly loosening credit will create a more favorable market for buyers, giving renters incentive to take the big step into buying.

"Buying conditions are getting better every day, and in time the allure of fixed housing payments and building wealth through home equity will draw more buyers out of rentals and into homeownership," he said.

Survey: Nearly 70 Percent of Industry Professionals See Lower Down Payment As Positive

Author: Brian Honea December 11, 2014 Share on facebookShare on twitterShare on emailon pinterest_shareMore Sharing Services4

The majority of mortgage industry professionals said they believed that the lowering of the down payment to 3 percent for first-time homebuyers by Fannie Mae and Freddie Mac was a step in the right direction for the housing market, according to theCollingwood Group's November 2014 Mortgage Industry Outlook Report released earlier this week.

In a survey conducted online distributed to a diverse group of mortgage and housing industry professionals, 69 percent of respondents said that lowering the down payment was a move in the right direction for housing, while 31 percent said it was a move in the wrong direction, according to the Collingwood Group. Though the survey respondents represented professionals who work in all phases of the mortgage process, the largest percentage of respondents (50 percent) were lenders or originators.

According to the Collingwood Group, the survey respondents who believed lowering the down payment was a positive move said it reflected concern of policymakers with current market dynamics, and it indicated a willingness on the part of the Federal Housing Finance Agency (FHFA) to ease lending standards. At the same time, most respondents pointed out the existence of other high loan-to-value (LTV) products and said they believed the Federal Housing Administration (FHA) offered the best option.

"The announcement of a low down payment mortgage option may create more opportunities for buyers to afford housing; however, it falls short of appropriately loosening tightened credit standards for other LTV loans," one anonymous survey respondent said in the report. "The 97 percent allows the GSEs to capture loans that would otherwise go to FHA."

According to the Collingwood Group's report, this point raised the question as to whether FHA would lower its insurance premiums sometime in 2015 in order to compete. A spokesperson said it has not been determined whether the premiums will be lowered.

"FHA has made no decisions regarding the premiums," HUD press secretary Cameron French said. "We are regularly evaluating a number of factors to ensure our premiums are at the right levels. As a result of the most recent annual report, we are looking through new information and will use that to inform any future decisions."

Forecast Calls for Modest Growth in Home Sales for 2015

Author: Tory Barringer December 9, 2014 Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services0

In keeping with other recently released predictions, the latest housing forecast from market research firm IHS Global Insight calls for modest growth in home sales in 2015 following what's been a disappointing year.

In her outlook, IHS economist Stephanie Karol focuses on two major trends that have shaped the housing market in 2014: low household formation and diverging trends for new versus existing-homes.

According to data from the Census Bureau, the country saw the addition of only 467,000 new households between March 2013 and March 2014, well below the post-recession average of about 600,000 per year.

While formations are expected to disappoint again in 2014, Karol predicts next year will see the addition of 1.08 million new households, with economic growth driving up the rate of new formations—and demand for new housing.

"As a swell in steady employment joins with rising wages, household formation should climb, boosting homeownership rates," she said.

With demand projected to rise, Karol anticipates homebuilders will respond by ramping up housing starts, closing the massive gap between existing single-family inventory and the unsold stock of new homes (which she estimates at nearly 40 to one) and boosting new home sales up to 480,000.

Together, both new and existing-home sales are forecast to rise to 5.34 million annually, the result of improving home equity spurring more homeowners to sell.

"As a result, inventories have expanded—and families, who are no longer being consistently outbid by investors with plenty of cash on hand, have entered the market in sufficient numbers to stabilize median price growth in the 4–5 percent range," Karol said. "Overall, the post bubble-landscape will continue into next year, but with slightly smoother terrain."

FHA Loan Limits Will Not Change for 2015

Author: Tory Barringer December 5, 2014 Share on facebookShare on twitterShare on emailMore Sharing Services60

The Federal Housing Administration (FHA) announced Friday it will leave loan limits unchanged for the highest- and lowest-cost housing markets in 2015.

For most high-cost housing markets, the maximum allowable amount for an FHA loan will stay at $625,000, a threshold first set at the start of this year.

For low-cost metro areas, the limit will remain unchanged at $271,050, the agency announced.

FHA recalculates its national loan limit every year, basing its math on a percentage calculation of the national conforming loan limit for mortgages eligible for purchase or guarantee by the GSEs. That limit was also left untouched by the Federal Housing Finance Agency and will stay at $417,000 for most of the country next year.

FHA will continue to insure mortgages at a much higher threshold—$938,250—in certain established high-cost areas, including Alaska, Hawaii, Guam, and the Virgin Islands.

The agency also announced that loan limits for FHA-insured reverse mortgages will also be left untouched. FHA's reverse mortgage product, the Home Equity Conversion Mortgage (HECM) will have a maximum claim amount of $625,500.

October Sales, Prices for Existing Homes Top 10-Year Average

Author: Brian Honea December 2, 2014Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services12

The figures for both sales and median price for existing homes in October nationwide were higher than the "10-year October average," or the average of that data from the previous 10 Octobers, according to the National Association of Realtors.

The number of existing homes sold in the U.S. stood at about 5.26 million in October, coming in just ahead of the 10-year October average of about 5.198 million, according to NAR. The Midwest and South experienced a similar trend with existing home sales, while October's existing home sales figures for the West and Northeast were below the 10-year October average.

NAR reported that there have been four consecutive year-over-year gains in October for existing home sales for every region except the West, which experienced a slight decline in October. This is likely due to existing home sales hitting their low point in 2010, shortly after the sales figures were buoyed by the first-time home buyer tax credit in late 2009.

Meanwhile, the median price of existing homes in the U.S. for October 2014, reported at $208,300, was higher than the 10-year nationwide October average of $191,500, NAR reported. The median price in October was higher than the 10-year average in all regions except the Northeast, according to NAR. While year-over-year median existing home price data shows prices generally struggling from 2006 to 2011, prices have improved in the last three years, although the growth rate for existing median home price has decelerated over the past year, NAR reported.

Emphasizing charm and weather readiness can pay big dividends when it's cold outside.

For your home to look its best during a winter viewing, it should feel both welcoming and warm.

It may not be your first impulse to list your home in winter, but life events can sometimes dictate timing on when moves must happen. Knowing how to best show off your home to its full advantage can pay even bigger dividends in the winter, when daylight hours run short, temperatures drop, and the usual rules may not apply.

If you were selling your house in the summer or spring, you’d likely address any cosmetic concerns as part of the staging process. The same attention to detail is important in the winter.  Keep up the curb appeal

Curb appeal has a different meaning in winter weather, but the same basic principles apply: tidying the exterior and clearing driveways and walkways are essential. Carpet should be recently cleaned and in good repair — and now’s the time to embark on a mission to make your home clutter-free by removing photographs and knickknacks.

 Emphasize light

For your home to look its best during a winter viewing, it should feel both welcoming and warm. Consider removing some window treatments to allow windows to shine at their full size. If showing your home during daylight hours, open all your remaining draperies or blinds to maximize light; during evening hours, you can choose a pleasant combination of reduced overhead, floor, and table lamps, which can impart a warm and comforting glow throughout all the rooms you’ll be showing. 

Highlight winterized features

On the flip side, emphasizing features that make your property a smart winter buy can also help seal the deal after your home passes the charm test. Your home can be more attractive to winter buyers with features like an attached and enclosed garage, a new water heater or HVAC components, or skylights or other energy-efficient upgrades. Winter buyers want to be confident that their new property will be well winterized for the immediate months ahead.

 Show all seasons

Take advantage of the opportunity to display your home’s charm by providing a photo portfolio with your listing — or even laying out a photo album of your home — and be sure to include pictures from all seasons.

No matter how you choose to make your home more sellable, stay within your budget. You won’t want to blemish your credit picture right in the middle of making a move — one of the major life events when you’ll want your credit in tiptop shape.

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