TAX REFORM TO IMPACT FACTORS RELATED TO HOME VALUES, HOMEOWNERSHIP

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Realtor Magazine Full Article

What is the potential implication of tax reform on homeownership? To find answers, the National Association of REALTORS® commissioned a study to review the impact of comprehensive tax reform.

The result offers the implications of tax reform that would lower and consolidate marginal tax rates to three rates with a top rate of 33 percent, double the standard deduction, eliminate all itemized deductions other than charitable contributions and mortgage interest, eliminate personal exemptions and the Alternative Minimum Tax, and cap the tax rate on pass-through business income at 25 percent. The following are highlights of the report.

Read the entire report

Mortgage Interest Under Current Law

• A projected 35.4 million households will claim itemized deductions of $359 billion for mortgage interest in 2018. Almost threequarters of them (25.3 million) have incomes between $50,000 and $200,000.

State and Local Property Tax Deduction

• In 2018, an estimated 40.7 million taxpayers will report itemized deductions for property taxes of $206 billion. Seventy percent of the taxpayers claiming this deduction are estimated to have adjusted gross income (AGI) between $50,000 and $200,000.

Overall Impact of Tax Reform

• Overall, the reform proposal would decrease federal revenues by $1.1 trillion over the 2018 to 2027 period.

• Tax expenditures associated with homeownership (the amount of foregone revenues from the mortgage interest and property tax deductions) would drop by 82 percent or almost $1.1 trillion over fiscal years 2018-2027.

Distributional Impact of Tax Reform

• Taxpayers (including both homeowners and nonhomeowners) with AGI between $75,000 and $250,000 would on average pay higher income taxes, while all other income categories would on average enjoy tax reductions.
• Homeowners with AGI between $50,000 and $200,000 would see an average tax increase of $815.
• Non-homeowners with AGI in the same range would see an average tax reduction of $516.
• Taxpayers with AGI under $50,000 would see average tax reductions of under $100.
• Taxpayers with AGI over $200,000 would see average tax decreases of over $15,000.

Impact of Tax Reform on Housing Prices

Comprehensive tax reform will impact the demand for owner-occupied housing by reducing the number of homeowners who claim the mortgage interest deduction, eliminating the itemized deduction for property taxes, and decreasing marginal tax rates.

• The after-tax cost of homeownership will increase while the opportunity cost of home equity (relative to alternative investments) will rise. These factors will lead to a decline in housing prices in the short run, as housing becomes a less attractive investment.

• Home prices in the short run would fall by an overall average of 10.2 percent because of the comprehensive tax reform. The price impacts in specific localities will vary based on local conditions. The report found decreases between 8-12 percent based on alternative assumptions for local conditions.

April 2017 Housing Affordability Index | by Michael Hyman

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At the national level, housing affordability is down from last month and down from a year ago. Mortgage rates increased to 4.11 percent this April, up compared to 3.89 percent a year ago.

• Housing affordability declined from a year ago in April moving the index down 6.0 percent from 166.1 to 156.2. The median sales price for a single family home sold in April in the US was $246,100 up 6.1 percent from a year ago.
• Nationally, mortgage rates were up 22 basis point from one year ago (one percentage point equals 100 basis points) while incomes rose 2.4 percent.
• Regionally, the Midwest had the biggest increase in price at 7.8 percent. The South had an increase of 7.7 percent while the West had a 6.9 percent gain in price. The Northeast had the smallest incline in price of 1.1 percent.
• Regionally, all four regions saw a decline in affordability from a year ago. The Midwest had the biggest decline of 7.9 percent. The South followed with a decline of 7.5 percent. The West had a decline of 7.3 while the Northeast had the smallest decline of 2.1 percent.
• By region, affordability is down from last month except in the Northeast where there was a modest increase of 0.6 percent. The Midwest had the biggest decline of 4.0 percent followed by the South who had a decline of 1.2 percent. The West had the smallest decline in affordability of 0.9 percent.
• Despite month-to-month changes, the most affordable region is the Midwest where the index is 193.7.  The least affordable region remains the West where the index is 111.8.  For comparison, the index is 155.9 in the South, and 162.9 in the Northeast.
• Mortgage applications are currently up this week. Even though rates are higher from a year ago, they are still lower than they have been all year.
• What does housing affordability look like in your market? View the full data release here.
• The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

4 Ways to Get a Private Money Loan with Bad Credit in Florida

About Eugene Hoffman

So you’re ready to buy some real estate. That’s wonderful! In most cases, you will need to secure financing for your purchase. But how do you get a private money loan with bad credit?

Before you begin to feel defeated, learn about the different ways you can get a hard money loan, even if your credit score isn’t where you want it to be. 

First thing is first…. Check Yourself!

Before you apply for a line of credit, you’ll want to know exactly what your credit report looks like. If there are some things you can clear up quickly, do so.

A couple of small collection items can take a huge toll on your credit and significantly decrease the amount you are able to borrow. Paying a small amount up front can help you borrow a greater amount in the long run. Sometimes you may find an error on your credit report that can reduce your score.

Ensure accounts that have been paid off are reflected as such in your report and are not listed as outstanding. Once you’ve gotten your credit buttoned up, you can begin thinking about different options for getting a loan.

1. Call Your Bank

Aside from yourself and maybe a significant other, nobody knows more about your finances and your ability to pay back a loan, more than your bank. Your bank has intimate knowledge of your spending habits, your average balances, the number of times you’ve had an overdraft, and they can base your loan off of these factors in addition to your credit score.

If you have a positive banking history, but low credit due to one mistake or difficult situation, your bank will see this. Find out what your bank can do for you before looking at other sources.

2. Peer to Peer Lending

An option many people never even consider is peer-to-peer lending. Online services and big data come together to help connect investors and borrowers. Companies such as Prosper and Lending Club allow borrowers to receive funds without the use of an official lending institution.

This makes the process of getting your funds fast and simple. Fees are minimal and many other factors aside from credit are looked at when determining your rates and credit limit.

3. A Loan From Family or Friends

This can turn into a sticky situation if not done in a professional manner. If a friend or family member agrees to help you with a loan, the process should be handled in a formal way. Specific terms of repayment need to be set, a loan agreement signed by both parties and all expectations need to clearly be stated in writing.

You can even go so far as reporting the loan to the credit bureaus, this will help you repair your credit in the long run. Be careful when borrowing from someone you are close to. You wouldn’t want a financial disagreement hurt a friendship or family relationship.

4. Find a Co-Signer

If you have a supportive friend of family member who wants to help but doesn’t have the cash to give you a loan directly, they might be willing to co-sign on a loan with you.

This is a risk for them, and could potentially destroy both of your credit scores should you default on the loan, and your co-signer isn’t able to pay. It is a responsibility not to be taken lightly and should only be done between two people who only have the highest amount of trust for one another.

In Conclusion…

Just because you have bad credit, doesn’t mean you won’t be able to get a loan. Explore the many alternative options available to you and do your homework before you apply for any loan.

3 Ways To Appeal To Buyers in Orlando

June 10, 2017

By Eugene

Get a Fair Cash Offer Today

About Eugene Hoffman

Having a well thought out asking price will bring a lot of interest to your property in Orlando. However, you’ll want to employ some additional tactics in order to really appeal to buyers. Ready to make your house memorable and primed for a quick sale?

We’ve got you covered in our latest blog post!

Last weeks Blog post on Upgrades you need.

Appeal To Buyers By Increasing Curb Appeal

Curb Appeal

The initial feeling a person gets when they walk up to the front door will play a big role on the number of offer you receive.

Start with the front yard and make some small changes. You can do most things on your own, for a relatively small budget. Touch up the trim, paint the mailbox and plant some flowers near the walkway. Hide your trash cans and keep the yard picked up and free of bikes and personal items that can be left out.

In addition, keep the backyard neat and tidy, with both areas nicely landscaped and well maintained. You can spruce up the backyard by setting up the furniture in an inviting and welcoming manner. Let the prospective buyer be able to imagine themselves in the backyard, hosting friends and family. Adding pretty plants and flowers can be wonderful, just don’t make the area seem too high maintenance.

Don’t spend excessive amounts of money adding a whole new patio or deck. You won’t be able to recover the cost, and most potential buyers would prefer to upgrade on their terms.

Avoid Over-Personalization

Avoid Clutter

You want your home and living spaces to be warm and inviting. A few personal touches are great, but keep them universally appealing.

For example, decorate with a couple of bold statement pieces, and put some interesting books on the shelves. However, don’t have too many personal photographs on display or paperwork laying around.

The idea is to make the potential buyer feel as if they could be in their own home, not intruding upon yours.

You don’t want people to be distracted by clutter, or see dishes in the sink. While it might be a lot of work for you and your family, you will want to get your home extremely clean and keep it that way until you move. Clear shelves and desk spaces of personal items. Keep food in your cabinets, not out on counters. And make sure the bathroom vanities are always free of personal effects, keeping your belongings out of sight and in the medicine cabinet.

Appeal To Buyers By Setting The Mood

There is more to getting an offer than what the potential buyers see with their eyes. You have to think about how they will feel when they walk in the front door. Make sure the lighting is beautiful and play soft music in the background to make people feel comfortable.

Light a candle that smells of fresh bread or something warm and soothing.

Keep your color pallet neutral, using pops of color in your throw pillows and other decorations. Using a neutral pallet will allow a potential home buyer to imagine how they would set up the room. A bright and overpowering wall color can be off-putting to someone with different taste.

3 Ways To Appeal To Home Buyers in Orlando

www.eugenehoffman.com

June 10, 2017

By Eugene

Get a Fair Cash Offer Today

About Eugene Hoffman

Having a well thought out asking price will bring a lot of interest to your property in Orlando. However, you’ll want to employ some additional tactics in order to really appeal to buyers. Ready to make your house memorable and primed for a quick sale?

We’ve got you covered in our latest blog post!

Last weeks Blog post on Upgrades you need.

Appeal To Buyers By Increasing Curb Appeal

Curb Appeal

The initial feeling a person gets when they walk up to the front door will play a big role on the number of offer you receive.

Start with the front yard and make some small changes. You can do most things on your own, for a relatively small budget. Touch up the trim, paint the mailbox and plant some flowers near the walkway. Hide your trash cans and keep the yard picked up and free of bikes and personal items that can be left out.

In addition, keep the backyard neat and tidy, with both areas nicely landscaped and well maintained. You can spruce up the backyard by setting up the furniture in an inviting and welcoming manner. Let the prospective buyer be able to imagine themselves in the backyard, hosting friends and family. Adding pretty plants and flowers can be wonderful, just don’t make the area seem too high maintenance.

Don’t spend excessive amounts of money adding a whole new patio or deck. You won’t be able to recover the cost, and most potential buyers would prefer to upgrade on their terms.

Avoid Over-Personalization

Avoid Clutter

You want your home and living spaces to be warm and inviting. A few personal touches are great, but keep them universally appealing.

For example, decorate with a couple of bold statement pieces, and put some interesting books on the shelves. However, don’t have too many personal photographs on display or paperwork laying around.

The idea is to make the potential buyer feel as if they could be in their own home, not intruding upon yours.

You don’t want people to be distracted by clutter, or see dishes in the sink. While it might be a lot of work for you and your family, you will want to get your home extremely clean and keep it that way until you move. Clear shelves and desk spaces of personal items. Keep food in your cabinets, not out on counters. And make sure the bathroom vanities are always free of personal effects, keeping your belongings out of sight and in the medicine cabinet.

Appeal To Buyers By Setting The Mood

There is more to getting an offer than what the potential buyers see with their eyes. You have to think about how they will feel when they walk in the front door. Make sure the lighting is beautiful and play soft music in the background to make people feel comfortable.

Light a candle that smells of fresh bread or something warm and soothing.

Keep your color pallet neutral, using pops of color in your throw pillows and other decorations. Using a neutral pallet will allow a potential home buyer to imagine how they would set up the room. A bright and overpowering wall color can be off-putting to someone with different taste.

3 Home Upgrades To Invest In and 3 To Forget About

Get a Cash Offer on your home.

When buyers begin thinking about selling their home in Orlando, upgrades can be a first step many people take. However doing too much, or upgrading things that don't provide much return can be a waste of time and money.

We have put together our list: of 3 upgrades to invest in and 3 to forget about.

3 Upgrades To Invest In:

Do: Paint

A fresh coat of paint can easily brighten up and revive a room. Try to stick with neutral colors and add in pops of color elsewhere, such as throw pillows or artwork. Painting is a relatively low-cost upgrade that can have a big impact. May I suggest using knockdown. Spraying on knockdown is messy but it adds appeal.

Plus a fresh coat of paint will cover and dings in the wall, nail holes, etc.

Do: A Kitchen & Bath Facelift

modern and comfortable kitchen

You might have heard that an upgraded kitchen and bathroom are two of the best areas to focus on when upgrading your home. However, you can do some smaller upgrades that will make a big impact without costing a fortune. Often when cabinets are professionally painted and you upgrade your counter-tops that makes a notable effect.

New faucets, drawer pulls and resurfacing your cabinets are affordable ways to revitalize the space. Some appliance manufacturers sell new and alternate colored faceplates.

For example, swapping out the front of your dishwasher to match the other appliances is a great way to save money and tie things together.

You can take the same principles to give your bathroom a quick makeover. Vinyl tiles can go on the floor, right over what you currently have. Do a deep cleaning of the grout, and re-grout if needed.

Fix any cracked tiles or broken hardware. (Wobbly towel racks, etc.) Another option to a complete shower renovation is to install a pre-fab cover. This is much cheaper than doing a whole shower overhaul.

Do: Landscaping

Planting some flowers out front or covering dirt with a pretty, fast spreading ground cover will give your home instant curb appeal. If needed, have trees and bushes trimmed and keep the lawn mowed nicely.

Depending on your climate, you can plant succulents or lay down pretty rocks to keep the space well maintained, but low-maintenance.

Maybe throw a fresh coat of paint on the mailbox or hang up a bird feeder and some hanging plants. Small touches and a well-groomed yard will draw anyone in.

3 To Forget About:

Don't: Finish The Basement

This can turn into a major project that can be both expensive and time-consuming. The numbers show you won't end up getting back anywhere close to what you put into it.

Overall, most homebuyers will want to fix up the space to their taste anyhow. Maybe they want an open game room, or to add a couple of extra bedrooms.

When pricing the home, account for the unfinished space and let buyers know that is reflected in your pricing.

Don't: Add a Patio, Deck or Pool

Again, this can be very pricey, without much return. If you have an open area, use plants or pavers to tidy up and beautify the space. If the new homeowners want to build a deck, they can do so, but with their tastes and specifications in mind.

Adding a pool can cost a fortune, without providing a huge increase in what you will be able to ask for the home. In addition, a pool may actually deter buyers.

Prospective buyers with small children may worry about safety and many people may not want to worry about the hassle and upkeep of maintaining their own pool.

Don't: Do A Major Renovation to The Kitchen or Bathrooms

Don't waste your money with a complete overhaul unless it is absolutely necessary due to water or fire damage. The cost does not make sense, especially when homebuyers will have their own tastes. Many homeowners would prefer a credit to the home price allowing them to upgrade on their terms.

In summary: Don't over-improve... keep it simple!

About Eugene Hoffman

Whether you are looking to buy or sell, Eugene Hoffman can help you with some great tips and strategies! Fill out this form now, and someone from our office will be in touch right away! Or give our office a call anytime! 

407-781-7312

NAR OFFERS RESPONSES TO ZILLOW'S "INSTANT OFFERS" written by Gram Wood

Get a free Instant Offer here

In select markets today, the competition isn’t just from other neighborhood brokerages. It’s also from companies like OpenDoor.com and OfferPad.com, with attractive online platforms that promise sellers a quick, hassle-free, cash sale.

Now Zillow has joined the fray, introducing its “Instant Offers” platform in two test markets, Las Vegas and Orlando. The platform enables sellers to receive and compare cash offers from selected investors, as well as obtain a CMA from one of Zillow’s paying customers, a Zillow Premier Agent.

For many real estate agents, these online marketplaces feel like a threat to their role in the transaction and their livelihood. Zillow, which makes a significant share of its revenue providing tools and services to real estate agents, has moved to dispel that concern, saying it will encourage, but not require, sellers to connect with an agent to close the transaction.

It remains to be seen whether Zillow will be successful enough to expand Instant Offers to more markets. If it does, the promise of a quick sale may capture some consumers’ attention. But many professionals say they relish the opportunity to compete and communicate their value as a real estate professional.

What would you say to sellers who are considering the option of a direct, cash sale? Here are six talking points.

•I work in this market and know the community better than any website could.

•I will help you get your house ready for sale.

•I will market your home to the widest possible audience, not just investors seeking to make a profit on your home.

•I will aim to get you the best offer possible, and I have the skills to help you negotiate the terms of the sale.

•One of the best parts of my job is helping you find a buyer who will love your home the way you do.

•As a REALTOR®, I follow a Code of Ethics that includes a pledge to “protect and promote the interests of my client” (Article 1). These online companies may facilitate your transaction, but not necessarily with your interests in mind. With “Instant Offers,” unless you choose to work with an agent, you’ll be on your own handling the details of the transaction.

If past performance is any indicator of the future, sellers will continue to gravitate your way. The National Association of REALTORS®’ 2016 Profile of Home Buyers and Sellers showed that 89 percent of sellers worked with a real estate professional to sell their homes. Only 8 percent of home sales in 2016 were FSBOs, a form of which is direct sales.

Still, direct sales may pose other challenges to the industry.

In addition to competing for sellers’ attention, these online investor sales may exacerbate the already tight inventory situation many of your buyer clients are facing. Instant Offers, for example, connects sellers with a small group of investors who are partnering with Zillow. Sellers who go that route are taking their home out of the inventory for the average buyer.

Also, sellers who choose direct sales aren’t listing their property on the MLS. How will that affect the reliability of MLS data? Not just real estate professionals but also economists and governments use that data to spot market trends, determine fair market values, and make plans.

John Mosey, president of NorthstarMLS, which serves more than 16,000 real estate professionals in Minnesota and western Wisconsin, sees no cause for concern on that front. “We’ve dealt with things like the ‘coming soon’ phenomenon and off-MLS activity, and we’re seeing that these trends aren’t shifting FSBO numbers,” he says. “Our transaction volume in 2016 was $19 billion, and we’re in the Midwest, where market values don’t come close to the coasts. So you don’t need the off-market activity to get a true picture of what’s going on. I think the potential harm with these off-market listings is that a lot of them have never been market-tested, so it’s hard to get an accurate appraisal.”

If nothing else, Mosey adds, direct-sale platforms are yet another innovation that should make both MLSs and practitioners think more deeply about how to communicate their value.

Denee Evans, CEO of the Council of Multiple Listing Services, lives in Las Vegas where Instant Offers is being tested. She draws a correlation between real estate and her previous work in the financial industry. “Even when people began doing their own online trading, there was a healthy industry for financial planners. You need a professional to help you with that. There are too many little things to keep track of,” she says.

 “Even with my real estate knowledge, I don’t buy and sell houses myself,” Evans says. “There’s no replacement for a professional who does this every day and knows the ins and outs of the market.”

By Graham Wood, senior editor of REALTOR® Magazine