Ventura County Real Estate & Market Insights

Seniors & Family


 

Real Estate Matters

Silver Edition.  News & Issues for the Mature Market

        Quarterly Newsletter –February, 2007

www.seniorsrealestate.com


Simple Upgrades, De-cluttering

Boost Home Livability, Marketability

 

When Kathy and Marc Garneau bought their Highland Park, Ill., house in December, the property had received few bites. It’s no wonder why. The seller had lived in the property for four decades and had done nothing to freshen the décor. The property featured floor-to-ceiling shelves of clutter. The kitchen, bathrooms, and light fixtures were dated, and nearly every surface was covered in 1970s-style wallpaper. The thirtysomething move-up buyers snapped up the house for $50,000 below what comparable properties were going for.

 

Such scenarios are common when Seniors have resided in a house for decades, according to Kelly McFrederick of Kelly’s Staging® Kreations, a Largo, Fla.-based home stager. The properties are a hard sell, particularly when a neighborhood is attracting a younger demographic, she says.

Upgrades and de-cluttering are key to getting top dollar when selling a house. Why not perform some of the jobs before selling so you can enjoy the changes?

 

Tracy DeCarlo of Detailed Solutions, Inc., Altamonte Springs, Fla., and author of Don’t Forget the Linen Closets, recommends making simple changes that will allow you to better age in place, as well as boost the property’s appeal to prospective buyers later. Her specialty is increasing homes’ functionality during construction and remodeling projects.

 

She recommends starting with the garage. “A disheveled garage leaves a bad impression. It’s often the first thing you’re greeted by and the last place you see when leaving,” she observes. Small changes can improve aesthetics and functionality. Built-in storage with doors keeps possessions clean, hides pack-rat habits, and provides clean visual lines. Installing a utility sink with a pullout

faucet eases large clean-up jobs, and the addition of workbenches or countertops offers a convenient

spot for hobbies and home repair projects.

 

Barry Izsak, president of the National Association of Professional Organizers, author of Organize Your Garage in No Time, and founder of Arranging it All, Austin, Texas, expresses similar views. “The average two-car garage has become a no-car garage,” he jokes.

De-cluttering and organizing are the first steps. You could do it yourself or hire a professional organizer to create a strategy and assist you.

Izsak acknowledges the emotional attachment to clothes and objects. “Certain things represent a person’s life experiences and that adds another dimension to de-cluttering and organizing because it feels like you’re giving away a piece of your life,” he says. Another reason people often keep things: they say they paid good money for it. “But if you’re not using it, why keep it? Sell it and turn it back into money,” suggests Izsak.

 

Here are strategies to purge the most problematic areas.

 

Garage—Dispose of the easiest things first, such as broken VCRs and old paint. Then move methodically from section to section, deciding what to keep.

 

Closets—Set goals. Commit to reducing your wardrobe by half or eliminating everything you haven’t worn in three years.

 

Kitchen—and the bathrooms are critical areas to buyers. Start in the kitchen by purging gadget drawers of duplicates and items you never use. Then move to each cabinet and dispose of all unnecessary pots, pans, and appliances. Consider whether you really need 100 Cool Whip containers. If you have two sets of dishes, Izsak suggests giving away the everyday dishes and using the best ones for daily meals. “Enjoy them,” he says. “What are you waiting for?”

 

Collections—Edit collections and keep only your favorite items. Donate or sell the remainder. If you’re willing to let go of the entire lot, consider photographing the collection so you have the memory of those items.

 

Paper—Ask why you’re saving papers. If they have no legal or tax implications, toss or shred them. Create filing systems for items—bills, taxes, and insurance, for instance—that need to be kept. 

 

Once you finish purging, decide on upgrades. DeCarlo suggests simple changes that will help you improve your home.

 

Flooring—Replace carpeting with a low, tight pile in a neutral color. Such floor covering is less likely to cause trips and falls than others, and the upgrade can make the home more appealing during a sale.

 

Lighting—Brighten the entire house with recessed lighting, track lighting, and lights above sinks and in showers.

Hardware—Handles, not knobs, on sinks and doors are easier for everyone to operate. Those with arthritis don’t have to make painful twisting movements and everyone benefits if they can open a door by pushing a handle with an elbow.

 

Paint—Fresh paint can transform a space. Repainting is essential if rooms feature garish or dated hues.

Exterior--Freshly painted doors, abundant colorful flowers, powerwashed surfaces, trimmed bushes and trees, well-tended lawns, and gleaming windows all help to make a good first impression.

 

As you’re working, consider what buyers might want you to leave. When you sell, remain flexible if they want items such as your patio furniture, chandeliers, or storage units.

 

Though certain projects can be accomplished in a few hours, freshening an entire house will require significant time. Izsak recommends starting the organizing process at least six months to one year before moving. Then you can enjoy the improvements and not feel stressed.

 

Additional Resources:

 

-www.flylady.com—The site offers a wealth of tips and methods for creating order out of chaos.

 

-www.nahb.org/caps—The National Association of Homebuilders certifies specialists with expertise in helping Seniors with home renovations.

 

-www.napo.org--The National Association of Professional Organizers offers organizing tips and referrals to professional organizers.


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Real Estate Matters: News & Issues for the Mature Market

Movewest Realty & Financial, Inc.

2185 Ventura Blvd

Camarillo, CA 93010

Mark Thorngren SRES

           

 

Silver Edition.  News & Issues for the Mature Market

 

Quarterly Newsletter –November, 2006

www.seniorsrealestate.com


 

Ten Smart Tax Moves to Maximize Deductions, Minimize Pain

 

As you gear up for the holidays, keep the taxman—the IRS—in mind and make plans to minimize your tax hit when April 15th rolls around. A few smart moves before the end of the year could save you a bundle come spring. Qualifying for many tax benefits depends on individual circumstances, so it’s always wise to consult a qualified tax preparer. Here are some issues to ponder while you’re preparing your 2006 taxes.

 

1. Early mortgage and property tax payments

 

Pay your January, 2007 mortgage in December, 2006 and the mortgage interest for that January payment can be deducted on your 2006 taxes. Check with your local government to see if it’s possible to pre-pay property taxes and claim that deduction on your 2006 tax return.

 

2. Energy-efficient renovations

If you’ve modified your home with energy efficient products, such as solar panels, windows, and geothermal heat pumps, you may be eligible for a tax credit. The maximum credit is $500. Be aware that the rule has a few wrinkles. For instance, only $200 of that $500 can be taken for windows. Check to see whether your state has additional tax breaks for energy-efficiency improvements.

3.  Investment Property

 

Tally up the receipts associated with your investment property. Repairs--things to keep the property in good working condition--are deductible during the year you pay them. More significant investments, such as a kitchen or bathroom overhaul or a major renovation, get depreciated over 27.5 years for residential real

 

estate. Major improvements on non-residential investment properties are depreciated over

31.5 years.  

 

4. Points and refinanced mortgages

 

If you paid points when you refinanced a home mortgage, points are deductible in full in the year paid, if the proceeds of the loan were used to improve your residence. If they were used for something else (new car, vacation, etc.) they’re deductible, but only over the life of the loan. “If this is a second refinance, and the taxpayer was amortizing previous points over the life of the loan, the remaining points not previously deducted are allowed in full, but only if the new loan is with a different lender,” says Cindy Hockenberry, an enrolled agent and a tax information analyst at the National Association of Tax Professionals, Appleton, Wisconsin.

 

5. 1031 Exchanges

 

Profits on the sale of rental property are treated as a capital gain and you’ll have to settle up with Uncle Sam. One option to defer paying that tax is to re-invest the proceeds in a like-kind exchange. “To the extent the proceeds are reinvested, the gain is deferred until the replacement property is sold,” says Deborah Rood, a CPA and senior tax manager with Chicago-based Blackman, Kallick, Bartelstein.

 

6. Vacation property

 

Carefully track how much time you spent at a vacation property. When you own and rent out vacation homes, expenses are generally allocated between rental use and personal use, based on the number of days of each use.  If you use the home for 14 days or less, or less than 10% of the time it is available for rent, the expenses are all allocated to, and deducted from the rental income. If you meet this limited-use test, the vacation home is not considered used as a personal residence. Use by family members is counted as personal use by the owner, unless family members pay fair market rent.

 

7. Tax-free gifts

 

If you’re looking to reduce your taxable estate for heirs, one option is to gift money to children, grandchildren and others. Individuals can gift up to $12,000 (or $24,000 per couple) per year to anyone without tax consequences. Another option is to gift appreciated assets, such as a piece of real estate worth $12,000. “If I give a piece of real estate, it could be worth $15,000 in a few years and $30,000 down the road. It’s a way to legally give more than that $12,000 per year to someone,” comments Rood.

 

If your grandchild has a 529 college savings plan, you can contribute $12,000 per year and avoid any gift tax return filing requirement or gift tax liability. “That’s a great way to shift money to a grandchild and get money out of your estate,” says Hockenberry

 

8.  Parental dependent care

 

If you’re supporting a parent and provide over

half of his or her support, such as nursing home and medical expenses, you may be able to claim him or her as a dependent. Rules are stringent, so check with your tax preparer to determine whether your parent meets the dependency requirements.

 

9. Charitable donations

 

Those 70½ or older can designate up to $100,000 of their IRA directly to a charity. “It’s a neat tool for Seniors who might have a lot of money and are worried about estate tax issues. …a great way to give to their charity of choice and save some estate tax down the road for their heirs,” comments Hockenberry.

 

10. Tax advisors

 

Find a good tax advisor and tax return preparer. Rood recommends getting referrals from trusted friends, bankers and attorneys. Both Hockenberry and Rood advise seeking out someone with expertise in estate planning and Senior issues, so the person can offer long-term tax strategies versus just focusing on annual tax preparation.

The Senior Advantage Real Estate Council® today unveiled a new marketing campaign designed to highlight the special skills Seniors Real Estate Specialists® (SRES) bring to the homebuying and selling transaction. Senior homebuyers and sellers often are confronted with myriad choices as they prepare for retirement. The new marketing campaign stresses the requisite knowledge and understanding SRES designees possess to help seniors during a transitional period in their lives, from relocation to tax and estate planning. The marketing campaign also reflects the importance seniors place on their homes. Viewed as more than purely a financial investment, a senior's home is often synonymous with years spent raising a family as well as their personal ties to a community.

A national program since 1998, the Senior Advantage Real Estate Council® offers a specific designation, Seniors Real Estate Specialist® (SRES®), to identify those REALTORS® who have successfully completed its education program along with other prerequisites. By earning the SRES® designation, REALTORS® demonstrate knowledge and expertise to counsel senior clients and are prepared to offer those clients a variety of options when making life-changing decisions. One of the fastest-growing and most timely programs for REALTORS®, the council now has more than 8,000 Senior Real Estate Specialists® in all 50 states and Canada and adds hundreds of new members every month. SAREC®'s Web site at http://www.seniorsrealestate.com provides seniors and their family members with access to SRES® designees in their areas for assistance.

SAREC® is owned by Real Estate Business Services Inc. (REBS), a subsidiary of the California Association of REALTORS® (C.A.R.). REBS is the exclusive official supplier of premium incentive items for the National Association of REALTORS®.

The California Association of REALTORSâ ( http://www.car.org ) is one of the largest state trade organizations in the United States, with more than 135,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

 

 

   

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Mark Thorngren