Wednesday, February 24, 2021

The benefits of Townhome living

The Townhouse is design's answer to the demands of individuals looking for comfort, proximity to work and ease of maintenance. It merges the convenience of a condominium with those of a single-family residence to address the changing lives of many homeowners.

Living in a townhome is the perfect answer for many people who are looking for convenience, ease of maintenance, security and a feeling of community. These homes are similar to typical homes, but unlike single-family houses, they are connected to each other on either side of the unit. Townhomes bring the best of condominium and single-family living together.

For many, these advantages make buying a townhome a wise alternative to buying a single-family home -

For home buyers worried about square footage, a townhome offers a perfect solution. Generally buyers are able to afford more living space in a townhome than in a typical stand alone, single-family home. The townhome occupies a much smaller amount of real property, and builders use vertical space to get lots of square footage between the walls. Townhome builders design compact stairways and efficient hallways to give homeowners the greatest amount of square footage possible. The result is usually a much more convenient, comfortable, and spacious living area than would be achieved by purchasing a similarly priced single-family home.

Townhome living offers the benefits of limited responsibility and cost of upkeep for the property and yard. Since a townhome is attached to another dwelling, the exterior maintenance is drastically reduced. Most townhomes have smaller yard areas so yard work is minimal. To maintain a consistently well-manicured landscape, the front areas are typically maintained by homeowner association fee. The homeowner association bylaws spell out what the HOA is responsible for and what is expected of homeowners. At the end of the day, less exterior maintenance translates to money saved.

Even though the units are connected, each unit remains separated from the rest due to a private entry to each property. The noise reduction provides a welcome benefit, because even though traditional town homes are built with neighbors on one, or both sides, no residents live above, or below you.

You own the land on which your unit is built and any outdoor living space attached to your home.

With neighbors close by, it is difficult for a burglar to go unnoticed. Most town home developments are well lit and the close proximity brings neighbors together. Often a sense of protectiveness between residents exists and many residents find meeting people and making new friends easier.

A townhome is the perfect alternative for people with busy schedules. Less maintenance is ideal for homeowners who lead fast paced lives, travel extensively, and who cannot dedicate time to the many chores associated with single-family homes.

For first-time buyers and retirees, or those who travel a lot, townhomes offer an affordable alternative to single-family homes.

Until next time,

la chasse au bonheur

Tuesday, February 16, 2021

Top Ten Homeowner Tax Breaks

At tax time, it pays to be a homeowner. Whether you're buying or selling a home, fixing one up, or using it as collateral, there's an associated tax break. In fact, there are so many federal tax incentives that homeowners often fail to take advantage of at least one or two - which can add thousands of dollars to your tax bill. What follows are 10 of the best.

1 Home loan 'points' deduction

If you purchase "discount points" as part of your home loan (fees paid to a lender in order to lower your mortgage interest rate), you may be eligible to deduct 100 percent of that cost from your taxes. The same is true for a home-improvement loan. However, to qualify, the loan must be for your main, full-time home, not a second home, a vacation place, or a rental property. Points purchased as part of a refinancing loan also qualify for this tax deduction, but those have to be deducted over the life of the loan, and not all at once.

For all the details, search for "Topic 504"on the IRS website (

2 First-time homebuyer/long-time resident credit

You may be eligible for a first-time homebuyer credit. In fact, under the "long-time resident" clause, you could qualify for this credit even if it wasn't your first home.

For all the details, search for the article titled "First-Time Homebuyer Credit" on the IRS website.

3 Mortgage-interest deduction

In most cases, all the interest you pay on your home loan (your full-time home and any second home) is fully deductible on your federal taxes. What's more, if your loan includes private mortgage insurance payments, those are also deductible.

For all the details, search for "Publication 936" on the IRS website.

4 Mortgage interest credit

The mortgage interest credit is intended to help lower-income individuals afford home ownership. However, you must contact your state or local housing finance agency about the credit before you obtain a mortgage and buy your home. If you qualify, you may be able to subtract a set amount (a maximum of $2,000) from your mortgage interest payments every year you live in that house and owe money on the loan.

For all the details, see the section titles "Mortgage Interest Credit" of "Publication 530" on the IRS website.

5 Property tax deduction

Any state, local or foreign real estate taxes you've paid on your primary and/or second residence are also deductible on your federal income tax return.

NOTE: Many states and counties also impose local benefit taxes for improvements to property, such as assessments for streets, sidewalks, and sewer lines. Those taxes cannot be deducted. However you can increase the "cost basis" of your property by the amount of the assessment.

For all the details, search for "Topic 503" on the IRS website.

6 Home office deduction

If an area of your home (a room or other "separately identifiable space") is used exclusively as your principal place of business, you can deduct a portion of your total home expenses. How much you can deduct depends on the size of your home office.

For all the details, search for the article "Home Office Deduction" on the IRS website.

7 Home loan interest deduction

You may also be able to deduct a portion of the interest paid on a home-improvement loan, a home-equity loan, or a line of credit.

For all the details, search for "Publication 936" on the IRS website.

8 Capital gains reduction

When you sell a home, the federal government taxes you on any profits (the difference between what you bought the house for, and what you sold it for). That's the capital gains tax. You are allowed to deduct many of the costs related to selling your home from the associated capital gains - which reduces your capital gains tax - but reinvestment deferrals are no longer allowed.

For all the details, search for "Publication 523" on the IRS website.

9 Capital gains exclusion

Related to number eight, if the house you sell was your principal residence for two of the last five years, you can exclude up to $250,000 from your capital gains or $500,000 for married couples filing jointly.

For all the details, search for "Publication 523" on the IRS website.

10 Moving expenses deduction

If you move more than 50 miles to take a new job, you may be able to deduct a portion of your moving expenses - including lodging expenses, transportation costs, and any storage fees.

For all the details, search for "Publication 521" on the IRS website.

A final note

Before implementing any of these ideas, be sure to research them thoroughly on the IRS website ( and/or consult with a certified public accountant or tax professional.

Until next week,

la chasse au bonheur

Monday, February 8, 2021

Factors affecting the sales price of your home

Pricing a home for sale is not nearly as simple as most people think. You can't base the price on what the house down the street sold for. You can't depend on tax assessments. Even automatic valuation methods (AVMs), while useful for a rough estimate of value, are unreliable for purposes of pricing a home for sale. 

AVMs like those used by Zillow and Eppraisal, have been used for many years by banks for appraisal purposes. They are derived from algorithms based on past sales. But producers of AVMs agree that they are not accurate indicators of home value. For example, states, "Our data sources may be incomplete or incorrect; also, we have not physically inspected a specific home. Remember, the Zestimate is a starting point and does not consider all the market intricacies that can determine the actual price a house will sell for. It is not an appraisal.

So what does Zillow recommend sellers do instead? The same thing the real estate industry has been advising for decades: Ask a real estate agent who knows your neighborhood to provide you with a comparative market analysis. 

Here's what I consider when determining the value of your home:

The location of your home will have the biggest impact on how much it can sell for. Identical homes located just blocks apart can fetch significantly different prices based on location - specific conditions unique to each, including: traffic, freeway-access, noise, crime, light, views, parking, neighboring homes, vacant lots, foreclosures, the number of surrounding rentals, access to quality schools, parks, shops, restaurants and other services all affect the value of your home. 

Another major factor that also can't be controlled is your local housing market (which can be quite different from the national, state or city housing markets). If there are few other homes on the market in your local area (a situation known as a "seller's market"), you may be able to push your price. However, if there is a surplus of homes like yours for sale (a "buyer's market), your pricing will have to reflect that. 

The majority of buyers are not looking to purchase fixer-uppers, which is why any deferred maintenance and repair issues can also significantly impact the selling price of your home. When your home's condition is different than the average condition of homes in your location your price takes a hit. 

Widespread appeal
If you want to sell your home quickly and for the most money (and who doesn't?) you have to make it as appealing as possible to the largest pool of prospective buyers. The more universally attractive your home is, the greater the interest and the faster (and hopefully, competing) offers will come in. 

Comparable homes
The only neighboring homes that should be used to estimate the value of your home are those that have been carefully selected by a real estate agent with access to all the information and an in-depth knowledge of your neighborhood. 

In this highly competitive and quick-changing market is it critical to be priced correctly. With a comparative market analysis in hand, you can be confident that all of these factors, and more (I can't divulge all my pricing strategies) have been considered, and the recommended sales price for your house is both fair and competitive. Ultimately, this will garner you the highest possible price for your home. 

Until next time,

la chasse au bonheur