Daily Real Estate News

Former Fannie Employee Took Bribes to Discount Properties

NAR Daily News Magazine - February 19, 2019 - 1:00am

A former Fannie Mae sales agent was found guilty of accepting millions of dollars in bribes and kickbacks in discounting foreclosure properties and selling them for below market value.

 

Study: Reluctant Refinancers Missed Out on Saving Thousands

NAR Daily News Magazine - February 19, 2019 - 1:00am

Many homeowners are unwilling to refinance, thinking that some offers from banks may be “too good to be true.” But that could be a costly mistake.

How to Cozy Up a Large Space

NAR Daily News Magazine - February 19, 2019 - 1:00am

Spacious areas can sometimes feel cold and unwelcoming. Here’s how to add some warmth and comfort.

The 10 Most Common Defects Found in Home Inspections

NAR Daily News Magazine - February 19, 2019 - 1:00am

More than 1 million house repairs have required more than $11,000 in costs, according to a recent review.

Use Caution When Sending Automated Texts

NAR Daily News Magazine - February 15, 2019 - 1:00am

If automated text messaging is part of your marketing strategy, you could be setting yourself up as a tempting target for plaintiff’s lawyers.

Google Plans to Invest $13B In Real Estate

NAR Daily News Magazine - February 15, 2019 - 1:00am

The tech giant is proving itself as a powerhouse buyer of real estate across the country.

Don’t Underestimate the Importance of the Garage to Buyers

NAR Daily News Magazine - February 15, 2019 - 1:00am

Luxuries like pools and lavish living spaces may not be as enticing as a garage.

Prime Housing No More? Amazon Pulls out of NY for HQ2

NAR Daily News Magazine - February 15, 2019 - 1:00am

Brokers and real estate pros weigh in after Amazon announces it has halted plans to build a second headquarters in Long Island City, N.Y.

Mortgage Rates Drop to Lowest Levels in a Year

NAR Daily News Magazine - February 15, 2019 - 1:00am

Borrowing costs continue to decline, as rates drop to the lowest averages in a year.

5 Ways to Make Clients Feel Special on Valentine’s Day

NAR Daily News Magazine - February 14, 2019 - 1:00am

You don’t have to send your customers extravagant gifts to let them know you care. Here are some creative tips on how to express your gratitude that will leave a lasting impression.

Good Neighbor Program Shows Community Love in its 20th Year

NAR Daily News Magazine - February 14, 2019 - 1:00am

The service award program is celebrating its 20th anniversary. “We are more than REALTORS® who simply sell houses,” says one Good Neighbor recipient.

Move Here If You’re Single and Searching for Love

NAR Daily News Magazine - February 14, 2019 - 1:00am

Moving for romance may not be so far-fetched: A third of single Americans surveyed say a big determinant for their next move will be the number of dateable people who live there.

How to Avoid Couple Spats When Home Shopping

NAR Daily News Magazine - February 14, 2019 - 1:00am

Homebuying can be stressful, and couples may not always see eye to eye.

Study: Homeownership Makes You More Attractive

NAR Daily News Magazine - February 14, 2019 - 1:00am

Owning a home can boost appeal in the eyes of singles, a new report finds.

New Tax Deduction Cap Could Turn Big Refund Into Big Tax Bill

RisMedia Consumer News - February 13, 2019 - 4:28pm

(TNS)—The big tax question of the year: Will you get a supersized refund or suddenly discover that you’re going to end up writing one monster check?

No one really knows for sure in light of sweeping changes that hit homeowners, two-paycheck couples and families who once had a string of itemized deductions but no longer can take some breaks under the Tax Cuts and Jobs Act of 2017.

Taxpayers are getting their first look at how the new tax overhaul hits their pocketbooks when they file their 2018 federal income tax returns. The devil involving those deductions, such as those for property taxes and state income taxes, is in the details.

If you think you’re getting the same tax refund as last year—or even bigger with the tax cuts—think again. It’s not that simple. Some are owing more money.

A Novi, Mich., homeowner told me he was shocked when he was smacked with having to write a big check to pay his tax bill after he completed his 2018 tax return. He owes more than $3,000 when typically he received roughly a $4,000 refund in the past.

The couple in their 50s both have jobs and receive W-2s to report their wages. They pay about $9,000 in state income taxes and another $10,000 or so for property taxes on their Novi condo. Their children are older and don’t qualify for any child tax credit.

The homeowner told me that he understood there was a $10,000 limit on how much one could deduct for property taxes on the federal return, after the major tax overhaul. What he didn’t know: The $10,000 cap includes much more than property taxes. The limit also impacts how much the couple can deduct when it came to what they paid for state income taxes.

Together, what would have been more than a $19,000 deduction was limited to $10,000.

“Your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if Married Filing Separate),” according to IRS Publication 5307, which outlines basic changes in the tax package. “Any state and local taxes you paid above this amount cannot be deducted.”

Will You Be Able to Deduct State Income Taxes?
Many homeowners who itemize need to dig a little deeper into what’s known as the new SALT tax cap—the state and local tax deduction.

The limit covers how much you can deduct when it comes to property taxes, state and local income taxes, and sales tax, even license plates on cars in some states, such as Michigan, says Leon LaBrecque, chief growth officer for Sequoia Financial Group in Troy, Mich.

“I’m a good example,” LaBrecque says. “I pay a lot of Michigan income taxes, plus property taxes on two houses, plus license plates.”

Add all those taxes up, including the real estate taxes paid on his cottage, and he’s well over the new $10,000 limit for deductions.

Where people can run up against this limit: a larger property tax bill; a higher-income household; double-income W-2; multiple homes, like a cottage, LaBrecque says.

For example, a Michigan couple making $150,000 in income would pay around $6,500 in Michigan state income taxes. A home with a value of $165,500 might involve property taxes of $2,500 or higher in Michigan. Then state license tabs on a couple of cars (listed on Schedule A for those who itemize as “personal property taxes”) could be $300 or $350. If the cars are newer and nicer, the cost of the license tabs is higher. LaBrecque says his license tabs cost $800. He has a 2016 Jeep Grand Cherokee, 2016 Ford F-150, a 2015 BMW 550 and a 2017 Ford Escape.

The IRS also notes that: “No deduction is allowed for foreign real property taxes. Property taxes associated with carrying on a trade or business are fully deductible.”

What Happens If You Have a Cottage?
We heard much about how some taxpayers would be hard hit by the cap in high-property tax states, such as New York, New Jersey and Connecticut, but residents elsewhere are getting hit too, for various reasons.

“The vast majority of my clients are getting clipped due to the SALT ceiling,” says George W. Smith, a certified public accountant with his own firm in Southfield, Mich.

The ones getting hit often have higher earnings and possibly a second home, such as a cottage or a vacation home, he says. One client has a vacation home on the Chesapeake Bay along the East Coast and will lose about $20,000 in state and local tax deductions. She is single and will pay about $4,800 in income taxes.

The impact on the bottom line of the tax return, though, depends on whether they might no longer need to itemize because they can take advantage of the new standard deduction of $12,000 for singles and $24,000 for married couples filing a joint return.

“Some are benefiting from that regardless of the SALT cap,” Smith says.

Why You Shouldn’t Bank on a Big Tax
For many people, it’s a real surprise to see how their tax returns are playing out this year. Just because you’re getting a tax cut under the new rules doesn’t mean you’re going to see a tax refund in the spring. Many people already saw much of their tax break via their paychecks in 2018 when the tax withholding tables were changed and allowed workers to see an immediate break in take-home pay.

Some got more money during 2018 than they should have under their tax situation, and they will have to pay that back once their taxes are prepared and filed by April 15.

“That’s going to be a bad surprise for a whole lot of people,” says Christine Ishman, president of Northern Financial Advisors in Bloomfield Hills, Mich.

Ishman, an enrolled agent who prepares tax returns, says about 75 percent of her clients are paying more than they’d expected this tax season for a variety of reasons. Some lost key tax deductions. For example, the miscellaneous deduction was eliminated and one can no longer deduct job hunting expenses, moving expenses related to a new job, unreimbursed employee costs, tax preparation fees and the like. The costs of such items could have been deducted once expenses exceeded 2 percent of your adjusted gross income.

Take the case of the Novi couple. Under the new tax rules, they will still itemize but they lost miscellaneous deductions, according to Ishman, who prepared their return.

Like other tax filers, they also lost four exemptions for themselves and two children in college—which were $4,050 each on their 2017 returns. Each personal exemption reduced gross income by $4,050 on 2017 returns. The exemption phased out for higher earners.

They also saw more take-home pay, she says, and will now be giving some of that money back.

A variety of moving parts, of course, come into play when calculating your actual tax bill. Since the old tax rules no longer apply, your tax bill—and your tax refund—may not look anything close to what it did last year.

Most households will see some tax cuts, thanks to a lower tax rates and a higher standard deduction, which is nearly double what was used for 2017 tax returns. Nearly 65 percent of tax filers will see a tax cut overall and pay less for their 2018 individual income taxes than in the past under the old rules. The average tax savings would be about $2,180 for that group, according to the nonpartisan Tax Policy Center in Washington, D.C. About 6 percent are expected to pay more. The average tax increase would be $2,760. Twenty-nine percent would see no change.

Tackle your tax return as early as you can this year in order to claim any larger-than-expected refund. If you owe money, it’s better to know earlier in the game than at the last minute on April 15.

©2019 Detroit Free Press
Visit Detroit Free Press at www.freep.com
Distributed by Tribune Content Agency, LLC

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Report Reveals the “Power Markets” in Luxury

NAR Daily News Magazine - February 13, 2019 - 1:00am

These are the hotbeds of luxury home sales, and the markets to watch, says Coldwell Banker’s CEO.

What’s Your State’s Rate? Find Average Mortgage Rates By State

NAR Daily News Magazine - February 13, 2019 - 1:00am

Mortgage rates can vary across the country. View this chart to see by how much and where your state falls.

Hottest Housing Markets Stretch Past Typical Frontrunners

NAR Daily News Magazine - February 13, 2019 - 1:00am

A different kind of market is on the rise, stretching beyond the big cities and just out West.

Wallpaper: The Stay or Go Dilemma

NAR Daily News Magazine - February 13, 2019 - 1:00am

Here are some tips for gauging whether a home’s wallpaper decor is on point or subpar.

Home Prices Are Still Rising in Most Metros

NAR Daily News Magazine - February 12, 2019 - 1:00am

“But with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace,” according to NAR’s chief economist.

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