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Market Report: San Mateo County Real Estate Report

by Kathy and Michael Rain - The Rain Team

Here is an updated Market Report summarizing recent real estate activity. Please keep in mind that the values represented are based on current, detailed information from the regional Multiple Listing Service. If you need clarification on any of the figures or if you wish to take additional steps toward property ownership, please let us know. We are happy to help you.

 

 

Don’t Get Sidelined

by Kathy and Michael Rain - The Rain Team

Are Closing Costs Tax Deductible Under The New Tax Law?

by Kathy and Michael Rain - The Rain Team

Are closing costs tax deductible? What about mortgage interest? Or property taxes? The answer is, maddeningly, “It depends.”

Basically, you’ll want to itemize if you have deductions totaling more than the standard deduction, which is $12,000 for single people and $24,000 for married couples filing jointly. Every taxpayer gets this deduction, homeowner or not. And most people take it because their actual itemized deductions are less than the standard amount.

But should you take it?

To decide, you need to know what’s tax deductible when buying or owning a house. Here’s the list of possible deductions:

Closing Costs

The one-time home purchase costs that are tax deductible as closing costs are real estate taxes charged to you when you closed, mortgage interest paid when you settled, and some loan origination fees (a.k.a. points) applicable to a mortgage of $750,000 or less.

But you’ll only want to itemize them if all your deductions total more than the standard deduction.

Costs of closing on a home that aren’t tax deductible include:

Real estate commissions
Appraisals
Home inspections
Attorney fees
Title fees
Transfer taxes
Mortgage refi fees
Mortgage interest and property taxes are annual expenses of owning a home that may or may not be deductible. Continue reading to learn more about those.
Mortgage Interest

Yearly, you can write off the interest you pay on up to $750,000 of mortgage debt. Most homeowners don’t have mortgages large enough to hit the cap, says Evan Liddiard, CPA, director of federal tax policy for the NATIONAL ASSOCIATION OF REALTORS®. But people who live in pricey places like San Francisco and Manhattan, or homeowners anywhere with hefty mortgages, will likely maximize the mortgage interest deduction.

Note: The $750,000 cap affects loans taken out after Dec. 17, 2017. If you have a loan older than that and you itemize, you can keep deducting your mortgage interest debt up to $1 million. But if you re-fi that loan, you can only deduct the interest on the amount up to the balance on the day you refinanced – you can’t take extra cash and deduct the interest on the excess.

Home Equity Loan Interest

You can deduct the interest on a home equity loan or a second mortgage. But — and this is a big but — only if you use the proceeds to substantially improve your house, and only if the loan, combined with your first mortgage, doesn’t add up to more than the magic number of $750,000 (or $1 million if the loans were existing as of Dec. 15, 2017).

If you use a home equity loan to pay medical bills, go to Paris, or for anything but home improvement, you can’t write off the interest on your taxes.

State and Local Taxes

You can deduct state and local taxes you paid, including property, sales, and income taxes, up to $10,000. That’s a low cap for people who live in places where state and local taxes are high, says Liddiard.

Loss From a Disaster

You can write off the cost of damage to your home if it’s caused by an event in a federally declared disaster zone, like areas in Florida after Hurricane Michael or Shasta County, Calif., after a rash of wildfires.

This means standard-variety disasters like a busted water pipe while you’re on vacation or a fire caused because you left the toaster on aren’t deductible.

Moving Expenses

This deduction is also only for some. You can deduct moving expenses if you’re an active member of the armed forces moving to a new station.

And by the way, no matter who you are, if your employer pays your moving expenses, you’ll have to pay taxes on the reimbursement. “This will be a real hardship to many because it’s non-cash income,” says Liddiard. Some employers may up the gross to provide cash to pay the tax, but many likely will not.

Home Office

This is a deduction you don’t have to itemize. You can take it on top of the standard deduction, but only if you’re self-employed. If you are an employee and your boss lets you telecommute a day or two a week, you can’t write off home office expenses. You claim it on Schedule C.

Student Loans

Anyone paying a mortgage and a student loan payment will be happy to hear that the interest on your education loan is tax-deductible on top of the standard deduction (no need to itemize). And you can deduct as much as $2,500 in interest per year, depending on your modified adjusted gross income.

Ways to Increase Your Eligible Deductions

There are some other itemize-able costs not related to being a homeowner that could bump you up over the standard deduction. This might allow you to write off your mortgage interest. Charitable contributions and some medical expenses are itemize-able, although medical expenses must exceed 7.5% of your adjusted gross income.

So if you’ve have had a hospital stay or are generous, you could be in itemized-deduction land.

Also, if you’re a single homeowner, it could be easier for you to exceed the standard deduction, Liddiard says. The itemized deductions on your house will probably more quickly break the $12,000 standard deduction threshold than a couple’s similar house will break their $24,000 threshold.

Tax-Savvy Home-Buying Ideas

If you’re a prospective homeowner with an eye to making the most efficient use of your tax benefits, here are a few ways to buy smart:

Especially in expensive areas, buy a less expensive home so you don’t hit the cap on mortgage debt and local and property taxes, says Lisa Greene-Lewis, a CPA and tax expert for TurboTax.
If you’re buying a higher price home, make a bigger down payment so your original mortgage doesn’t exceed the $750,000 cap.
How to Decide If You Should Itemize

Though every homeowner’s tax benefits will be a little different, in the end, you’re building equity, you’ll likely make money when you sell, and you have the freedom to paint your walls any color you want and get a dog.

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7 Important Repairs To Make Before Selling A House

by Kathy and Michael Rain - The Rain Team
As a smart seller, you’ll want your home in tip-top shape — but you don’t want to eat into your profits by overspending on home improvements. You won’t be around to enjoy them anyway. The key is to focus on the most important repairs to make before selling a house to ensure every dollar you spend supports a higher asking price.

 

“Smaller and less expensive updates in combination with good staging will have a great return,” says Colorado Springs agent Susanna Haynie. But how do you know what things to do before putting your house on the market? Prioritize these updates — and consider letting the rest go.

#1 The Most Important Repair to Make Before Selling: Fix Damaged Flooring

Scratched-up wood flooring; ratty, outdated carpeting; and tired linoleum make your home feel sad. Buyers might take one step inside and scratch the property from their list. Want to know how to increase the value of your home? Install new flooring.

“Replace what’s worn out,” says Haynie. “Buyers don’t want to deal with replacing carpet, and giving an allowance is generally not attractive enough. Spring for new, neutral carpeting or flooring.”

If your home already has hardwood floors, refinishing does the job. Expect to spend about $3,000 on the project — and recoup 100% of the cost, according to the “National Association of REALTORS® Remodeling Impact Report.”

Consider swapping any old flooring for new hardwood. This project costs more at around $5,500, but you could recoup more than 90% of that at resale. If that’s not in the budget, any flooring update makes an enormous difference.

#2 Fix Water Stains

You’ve learned to live with the results of a long-fixed plumbing snafu, but for buyers, a water stain suggests there could be a dozen pesky problems hidden beneath the surface. That’s why this is one of the things to do before putting your house on the market.

“No buyer wants to buy a money pit,” says Haynie.

First, make sure the problem is fixed: Bring in a plumber to look for leaky piping or poor yard drainage if your basement is damp. Diverting rainwater from your foundation may cost as little as $800, and repairing a leaking pipe costs approximately $300.

As for the repair work, replacing a water-stained ceiling runs about $670, and drywall costs around $1.50 per square foot.

All are cheaper than a lost sale.

#3 Repair Torn Window Screens

So super inexpensive — and even DIY-able. You can purchase a window screen frame repair kit from a home improvement store for $10 to $15.

Considering the simplicity of this repair, making the fix is always worth it — and so are other small but highly visible issues. When you’re debating how to increase the value of your home, nix any small problems, snags, or ugly spots that might make buyers scrunch up their brows.

#4 Update Grout

Is your grout yellowing or cracked? Buyers will notice. New grout, on the other hand, can make old floors look like they came straight from the showroom.

“The best return-on-investment projects before selling a home involve making a home look like new,” says Malibu, Calif.-based agent Shelton Wilder. She recently sold a home above asking price after a complete re-grout.

This is another small fix with a big impact: Simple bathroom re-grouting may cost just $1 to $2 per square foot, increasing to $10 per square foot for more complicated jobs. And if you’re handy, you can save even more DIY-ing it.

#5 Resuscitate a Dying Lawn

Nothing says, “This one’s gonna take some work” like a brown, patchy, weedy lawn.

Fixing the problem doesn’t cost a ton of money — and you’ll get it all back (and then some!) once you sell. Hiring a lawn care service to apply fertilizer and weed control will cost about $375. Once you sell the home, that comparatively cheap fix could recoup $1,000. That’s an unbeatable 267% return on investment.

#6 Erase Pet Damage

Did your (sort of) darling kitten scratch your bedroom door? Fix the damage before listing your home. Otherwise, buyers may consider the scuffs a canary in the coal mine.

”If you have pet damage, buyers will [then] look for pet stains on the floor,” says Haynie.

Refinishing a door costs between $100 and $215 (or less, if you’re willing to DIY). Replacing pet-damaged carpeting or hardwood may be a bigger job than buffing out some scuffs — but it’s worth the cash.

#7 Revive an Outdated Kitchen

A full kitchen renovation is rarely worth it when it comes time to sell — even though buyers love a fresh look. “Kitchens are still one of the most important features for buyers,” says Haynie.

The problem is, this $65,000 upgrade isn’t something that buyers will pay you back for. Sellers recoup about 62% of a full-on kitchen renovation. If you’re updating the space just for your sale, focus on low-cost, high-impact projects instead.

“Updating the kitchen doesn’t need to be expensive,” says Wilder. “Painting wood cabinets, updating hardware, or installing new countertops or appliances could be enough.”

Setting up your home for selling success doesn’t have to be expensive. Focus on the most important repairs to make before selling a house by picking projects that do more than look pretty. Choose updates that get your home in selling shape and justify a higher asking price.

Photo by Renee Asmussen on Pexels

School is Cool

by Kathy and Michael Rain - The Rain Team

Market Report: San Mateo County Real Estate Report

by Kathy and Michael Rain - The Rain Team

Here is an updated Market Report summarizing recent real estate activity in your area of interest. Please keep in mind that the values represented are based on current, detailed information from the regional Multiple Listing Service. If you need clarification on any of the figures or if you wish to take additional steps toward property ownership, please let us know. We are happy to help you.

 

Don't Go Solo

by Kathy and Michael Rain - The Rain Team

Home Buyer Blunders

by Kathy and Michael Rain - The Rain Team

Popular Projects

by Kathy and Michael Rain - The Rain Team

Market Snapshot: San Mateo County Real Estate Report

by Kathy and Michael Rain - The Rain Team

 



Displaying blog entries 1-10 of 405

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The Rain Team
CA# 01169588 | CA# 01125976 | CA# 01908304
248 Main Street, Suite 200
Half Moon Bay CA 94019
Michael: 650-888-6361
Kathy: 650-888-6903
Fax: 866-396-0207

Kathy and Michael Rain of Coldwell Banker provides real estate services in the San Mateo County, California area including the surrounding communities: El Granda, Half Moon Bay, Montara, Moss Beach, Pacifica and San Mateo. Search for homes in San Mateo County. We list and sell residential real estate, investment properties, vacant land, lots for sale in the San Mateo County, California area.

Licensed in the State of California

Kathy Rain - CA BRE# 01169588 | Michael Rain - CA BRE# 01125976 | Coldwell Banker - CA BRE# 01908304
Cell Phone: (650) 888-6903 * Direct Phone: (650) 712-0411
San Mateo County Real Estate and Homes for Sale

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