PruCalVoices » Mark Hasha

‘Tis the Season for Tax Breaks

Mark Hasha — Tue, 07 Feb 2012 00:06:15 +0000

     With April 15 rapidly approaching many are working hard to complete their taxes. For those who have recently bought or sold a home, there are a number of tax deductions that that may be available to them.
   Real estate broker’s commissions, title insurance, legal fees, advertising costs, administrative costs, and inspection fees are all considered selling costs and may be used to reduce one’s taxable capital gain by the amount of the selling costs. That could result in a big savings depending on the final sale price.
Interest that is paid on a mortgage is also tax-deductible, within limits. A married couple filing jointly can deduct all their interest payments on a maximum of $1 million in mortgage debt secured by a first or second home.
   Buyers may also be able to deduct some of the interest they paid on a home equity loan or similar line of credit.
    One deduction that many buyers often overlook is points. Points or origination fees on a home loan that were paid during the purchase of a home are generally tax-deductible in full for the year in which they were paid.
     Refinanced mortgage points are also deductible but only over the life of the loan – not all at once. Homeowners who refinance can immediately write off the balance of the old points and begin to amortize the new.
    If your lender required private mortgage insurance, the PMI premiums are tax-deductible for mortgages taken out from 2007 through 2011.
   Making improvements to property prior to the sale or once one moves in might qualify for an interest deduction on your home-improvement loan. Qualifying capital improvements are those that increase your home’s value, prolong its life, or adapt it to new uses, such as adding a porch or installing energy-efficient windows.
    Many times during a sale, the seller will send the local tax collector’s office a check for real estate taxes prior to the closing. In many circumstances, however, the buyer will pay a pro-rated portion of the taxes for the year at closing. This tax deduction also gets overlooked.
    For those working from their new home: If a room is used exclusively for business purposes, they may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, and depreciation.
    In some instances, if you have moved because of a new job, moving costs may be deducted. These can include travel or transportation costs, expenses for lodging, and fees for storing your household goods.
    Every year the tax laws change and certain tax deductions become available while others phase out. If you have recently bought or sold a home, it’s probably a good idea to seek out a professional tax consultant to do your taxes as missing deductions that you can legally claim can add up to quite a bit of money.

Mark Hasha
Prudential California Realty
I can be reached at (650) 799-0731 (cell/text) or email mark@markhasha.com

It’s a Buyers’ Market for Real Estate Investors, too

Mark Hasha — Wed, 04 Jan 2012 01:51:36 +0000

Turn on any financial news program and at some point you’ll hear the experts extolling the virtues of diversification. Real estate, even through the market downturn, has long been considered a conservative, long-term strategy to growing wealth.
In fact, that very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across American and historically low mortgage rates, two essential factors that usually don’t trend in the same direction, have triggered a buyer’s market in many areas of the country. For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat.
While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.
• Learn all you can. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment’s notice. It could take days or months to sell a property, depending on the strength of the market in a particular region.
• Consider cash flow. You’ll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants.
• Start small. Look into buying a condominium, single-family home or a duplex. Leave large apartment buildings and commercial properties to the pros.
• Inquire at the local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.
• Find a property that will be in demand. Look for a moderately priced home with three or four bedrooms, two bathrooms, and a garage that sits on a quiet street.
• Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask a local real estate professional about the area, its history, and how fast (or slow) properties are moving.
• Inspect the home you’re considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can’t always predict problems, try to set aside some of the rental income for unexpected repairs.
• Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?
• Be ready to make fixes quickly and respond to the renter’s needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.
• See your tax advisor for related planning and laws that can affect your investment decisions.
Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.

Mark Hasha
Prudential California Realty
I can be reached at (650) 799-0731 (cell/text) or email mark@markhasha.com

California Prop 90 Update!

Mark Hasha — Thu, 02 Sep 2010 02:55:42 +0000

California’s Prop 90 allows a home owner in California to sell their home, buy a replacement property in a participating county, and move a lower prop 13 based tax value from their old home to the new county for the purpose of home tax assessment. It allows the adjusted base year value of the original (sold) property to be transferred to the newly purchased or constructed home if eligibility requirements are met.There are some restrictions like the claimant or claimant’s spouse must be at least 55 years of age. The replacement property must be your principal residence and must be eligible for the homeowners’ exemption.

Participating counties are Alameda, Orange, San Mateo, Ventura, Los Angeles, San Diego, Santa Clara and now, El Dorado County.

There are also purchase price restrictions on the new replacement property.

The purchase price of the new home can be:
100 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property,
105 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property, or
110 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.

So if you have been putting off buying that retirement home in the gold country because you weren’t sure you could afford the property taxes… now is the time.

Mark Hasha
www.markhasha.com
Mark is a Seniors Real Estate Specialist helping buyers and sellers in San Mateo County.

8 Tips to Save Your Sanity

Mark Hasha — Wed, 03 Jun 2009 23:32:37 +0000

I received some great advice from one of the great lenders I work with and I wanted to share it with you. Timely loan approval is critical in today’s real estate market and I wanted to share his tips with you.

8 Tips to Save Your Sanity

A buyer’s guide to the loan approval process.

Guidelines and requirements for loan approvals have recently become more rigorous and each transaction is processed with much more scrutiny. Keeping just a few things in mind could save your sanity, stress level and funding schedule.

1. Be expedient and thorough. When initiating a loan, and throughout the loan process, it is imperative to provide complete documentation to your Mortgage Advisor as quickly as possible. For instance, if all pages of the bank statement are requested, it really means all pages. While you and I might not think it’s necessary to include the reconciliation page of the statement, the lenders do. And, when they receive only five of the six pages of said bank statement, the loan process can become inefficient and stalled.

2. Keep detailed financial records. If it is necessary to transfer funds from one account to another or to sell stock for a down payment, keep a detailed paper trail of all transactions, deposits and liquidations. Lenders will request it.

3. Be available. Be sure to leave a contact phone number with your Mortgage Advisor if you are traveling for business or on vacation. Until all the loan approval conditions are met, you may be required to provide additional documentation or information.

4. Keep your day job. Lenders always contact your employer just before the loan funds. If you have left that company (quit, moved to a new company or retired), the lender will stop the loan from funding and recording.

5. Stay married. We’re certainly not suggesting that you be deceptive, however, be aware that filing for divorce during the loan process can bring progress to a halt. Most lenders will not approve or fund a mortgage loan until the final decree (settlement terms) is recorded.

6. Spill the details. Be sure to notify your Mortgage Advisor of any changes to the purchase transaction. Unidentified last minute changes, such as escrow holdbacks, seller credits or termite work, can wreak havoc with closing dates.

7. Safeguard your social security number. Lenders are increasingly using credit scores to assist in mortgage credit decisions. Don’t incur any new debt during the loan process. Doing so increases your debt-to-income ratio and reduces the amount you can borrow. If you decide to “just window shop” for a new car, don’t give into the temptation to give a sales person your social security number; it will enable them to check your credit score. Each credit inquiry – whether you ultimately make a purchase or not- lowers your credit score. The same holds true for pre-approved credit card offers that you receive in the mail. Do not respond to them. Doing so will result in a credit check. For more specific information on your credit score, visit www.myfico.com .

8. Stay current. Continue to make the required payments on your present loans and/or credit cards. This may seem obvious but once in awhile, in the flurry of excitement and activity, a buyer forgets. This puts the loan and escrow close in jeopardy.

A home is a significant investment. And, admittedly, it can be a bit overwhelming when you stop to think about the inspections, reports, documentation and the many details and considerations associated with this exciting purchase. Following the recommendations above will help to streamline the loan process, minimize delays and alleviate some stress.

Special thanks to Andy Block of Opus Advisors for providing me with this information.

Please let me know if I and the team of real estate professionals that I work with can help you with your next real estate transaction. www.markhasha.com

It is starting to trickle down?

Mark Hasha — Wed, 15 Apr 2009 17:24:03 +0000

A question that comes up when talking about today’s housing market is if the recent economic stimulus packages and federal bailouts that we are all paying for will actually help the average homeowner. I wish I could tell you that I understand how it all is suppose to work. You wonder how pumping billions of dollars of taxpayer dollars into bleeding financial institutions will actually trickle down and help average hard working families who are struggling to keep ahead of their daily expenses and keep a roof over their family’s heads. I can’t tell you how it is all suppose to work but I can tell you that I can now see it on my newest mortgage statement.

I have an adjustable loan. Like many of my clients my wife and I had to stretch ourselves to buy a home in the neighborhood that we wanted to live in. To do that we choose a 30 year adjustable loan with the first 5 years fixed at 5.75%, a good interest rate at the time, and payments we could afford. Like many others the economic downturn has had an effect on our income and we were a little worried about staying ahead of our house payments. Well the adjustment period on our loan just came due this April and guess what, it has adjusted to 4.0%, that is a $500 dollar a month savings for us. I still have a smile on my face. By understanding what needs to be done to help keep interest rates low during an economic downturn the Federal Reserve has helped keep my home affordable; thank you.

Award Winning Real Estate Company!

Mark Hasha — Thu, 27 Nov 2008 15:14:39 +0000

Prudential California Realty, San Bruno Is part of the Prudential Real Estate family which J.D. Power and Associates has ranked as Highest in Satisfaction for Home Sellers among National Full Service Real Estate Firms, in its 2008 survey. We are proud!

Current Real Estate Trends Affecting Brokers and Agents

Mark Hasha — Mon, 08 Sep 2008 15:12:17 +0000

I saw this really interesting list of current real estate trends on Wikipedia. The list is of the top 10 trends that are affecting the way real estate agents are doing business. I wanted to share it with you and over the next couple of weeks add my thoughts and comments on each trend.

The only annual report detailing real estate trends impacting the residential real estate brokerage business lists the following 10 trends as having the largest impact on residential real estate brokers and agents over the next 12 – 18 months.

Trend #1 – Growth of Social Media and Virtual Communities

Trend #2 – The Sub Prime Lending Collapse Driving Rise in Foreclosures

Trend #3 – The Importance of Information in Real Estate Business

Trend #4 – The Changing Borders and Structure of Multiple Listing Services

Trend #5 – The Search for Productivity in a Declining Housing Market

Trend #6 – Growth of Identity Theft in MLS and Increased Data Security Concerns

Trend #7 – Evolving and Changing Real Estate Business Models

Trend #8 – How Existing Large Real Estate Brokers are Expanding

Trend #9 – The Changing DNA of the New Breed of Real Estate Agent

Trend #10 – Rise of Women, Gen X and Minorities in Leadership Roles

I look forward to hearing your comments too.

Real Estate Roller Coaster

Mark Hasha — Wed, 09 Jul 2008 22:40:16 +0000

Is the Bay Area real estate market on its way back up or is it still coasting down?

On June 25^th the CALIFORNIA ASSOCIATION OF REALTORS® reported that home sales increased 18.1 percent in May in California compared with the same period a year ago, while the median price of an existing home fell 35.3 percent. So is that good news or bad for S.F. bay area real estate market? It depends.

If you need to sell your home the bad news is that your home may have given back any appreciation it had made over the last three years. The good news is that if you have owned your home for more than three years you should realize a gain on your home sale; it just won’t be at the top of the market. If you are selling your home to buy another, then more good news, your next home will cost less than it would have a year ago.

Have you thought of buying investment property in the past but the numbers just didn’t make sense? Good news, with the decrease in the prices of homes and the strong rental market due to over extended home owners returning to the rental market you can once again find properties that can generate enough income to cover expenses and offer good returns on future appreciation.

Despite all the confusing information in the media, the best news I got from the California Association of Realtors report was that home sales have increased. Real estate operates on the law of supply and demand and as the number of home sales increase, inventory will begin selling off and prices will once again return to stability and the long term appreciation will occur as it has always done in the past.