Real Estate Information

 Today is the 40th celebration of Earth Day. What started as an educational ‘teach-in’ in 1970 has turned into a global event dedicated to showing each of us how to do our part to protect the planet. Why should we want to protect the planet? Let’s start with the fact that Americans make up less than 5% of the world’s population, yet we consume 25% of the natural resources and generate 30% of the waste. Each one of us leaves a measurable footprint on the planet and it is determined by the demands we put on nature as it compares to the planet’s natural ability to meet those needs. It’s called your eco-footprint and it’s a concept that is widely being used around the globe to measure sustainability.

Your eco-footprint takes into account where you live, how many people live with you, the size of your home, the forms of energy used in your home, and energy saving measures in your home. The number of miles you travel, how you travel those miles, how you eat, what you eat and where you shop for food are all included in the calculation of your eco-footprint. Your eco-footprint also includes water saving devices in your home, the products used to build your home and the chemicals you use to clean it. And of course it includes the amount of trash you generate and how much you recycle. There are many other items that should be included in a measure of our ecological impact on Earth, but the eco-footprint calculator is a good start. You can measure your eco-footprint at www.footprintnetwork.org.

The typical American eco-footprint is enormous. Only citizens of the United Arab Emirates have a larger eco-footprint. Worse still, the needs of our global population exceed the ecological limits of our planet and it gets worse every year. We are taking from the planet faster than it can naturally renew or regenerate and are now tapping into the reserves at an alarming rate.

There is, however, good news. There is a great deal that each one of us can do to lighten our load on Earth and it doesn’t have to be painful or costly. It’s getting back to the three R’s: Reduce, Reuse and Recycle. When you use less energy, waste less water, create less trash and opt for non-toxic solutions—you’ll lower your eco-footprint. It really comes down to adopting everyday green living solutions. It may take a little effort to get started, but the rewards are immediate and impactful—providing savings in your bank account and a healthier future for our children. This year, attend an Earth Day event and learn how you too can do your part.

(c) 2010 Terri Bennett Enterprises, LLC. all rights reserved.

Latasha Hall never envisioned herself a homeowner. But by the end of the month, she will be. Just in time.

With the soon-to-expire tax credit for first-time buyers as an assist, the single mother plans to close on a $166,650 three-bedroom house in Clifton Heights, Pa. “If it hadn’t been for the credit, I wouldn’t have done it,” Hall said.

To be eligible for the federal tax credits—up to $8,000 for qualified first-timers and up to $6,500 for certain repeat buyers—houses must be under contract by April 30, with settlement by June 30, 2010.

With those deadlines in sight, some real estate agents say they are relishing their first busy days in months.

For some buyers, a tax credit is an added perk in an already-friendly market with good inventory and low mortgage rates.

For those like Hall, who is working toward her bachelor’s degree in behavior and addictions counseling and who works two jobs, it’s the last piece that fits the puzzle. In January, Hall asked a Realtor for help finding a rental home after her landlord’s lender foreclosed.

A loan officer with the Realty Company, looked at her income (about $54,000) and her credit score (which needed some work, but not much) and suggested she buy instead. The lender used a state loan program that would provide $5,000 of the $8,000 credit up front, for use on closing costs or maintenance on the house. Hall set to work paying off two past-due bills and bugging the credit bureaus—sending weekly faxes and calling often—to update her score quickly. “If I hadn’t heard about this credit, I wouldn’t have worked so hard to get it done,” she said. “This is my time to go out and do what I have to do. I kept thinking about my kids.”

The new Clifton Heights neighborhood is safer, she said, and it’s just two blocks from the school her 9-year-old son attends. The credit has been “a blessing,” Hall said.

To Realtors like Daren Sautter, it’s a relief. “It’s nice to be busy,” he said.

Sellers likely will be thinking the same thing, Realtors say, and listing prices could drop this month.

Daren recently helped Pat Poole price her four-bedroom Cherry Hill house to sell. At $290,000, it went after just one day on the market. Recently divorced, Poole was looking to downsize. She sold the house to a young couple who used the repeat-buyer credit. Her next task: finding a new house for herself and her 17-year-old son in time to secure her own tax credit. “I’m going to get in under the wire,” Poole said.

A flurry of activity is noticeable in areas with a strong inventory of homes affordable to young families, Realtors said.

But some brokers are seeing a “trickle-up” effect. Would-be buyers are able to sell their homes, aided by the rush for the tax credit, and upgrade to communities with better school systems or more historic charm.

In Haddonfield, N.J., the proximity to Philadelphia and access to the PATCO High-Speed Line were big draws for Jeff Minors and Amy Henry. Minors will commute to his job as a financial-news editor in New York City. The couple, longtime renters, were looking to move to southern New Jersey from Norwalk, Conn., with their 2-year-old son. They recently moved into a four-bedroom home in Haddonfield that cost about $575,000. The first-time-buyer credit was an added bonus, Minors said. “We were more concerned about finding the right house at the right price,” he said. “But it’s definitely a nice benefit.”

(c) 2010, Chelsea Conaboy, The Philadelphia Inquirer.

Some of these are one-time-only offerings. Others may apply only because your situation got so much worse, but that shouldn’t stop you from pursuing them. Here’s what to consider.

-Did you collect jobless benefits during 2009?

The American Recovery and Reinvestment Act of 2009 offered a bit of a tax break to jobless people for last year only. On 2009 returns, taxpayers can exclude up to $2,400 of unemployment compensation from taxable income.

Normally, all money received through unemployment compensation would be taxable, said Luis D. Garcia, a spokesman for the IRS in Detroit. Look for a Form 1099-G, Certain Government Payments, to show the total unemployment compensation paid to you in 2009.

If both a husband and a wife received unemployment compensation during 2009, each would be able to exclude up to $2,400 in benefits from taxable income, according to Mark Luscombe, principal analyst for CCH, a Wolters Kluwer business.

Report unemployment benefits that exceed the $2,400 limit—or $4,800 if both spouses were out of work and collecting—on Line 19 of the first page of the 1040.

- Did you hunt for a job during the year?

Take a close look at whether you could deduct some of the expenses involved, such as long-distance calls or unreimbursed travel. If you qualify, the deductions could apply even if you didn’t get hired.

Not everyone will get this break. You cannot, for example, deduct job-hunting expenses if you’re looking for your first job out of school or if you are looking for a job in a different line of work.

Other hurdles must be crossed, too. Bob Scharin, senior tax analyst for the Tax & Accounting business of Thomson Reuters, said you’d have to itemize deductions and see whether you have enough miscellaneous expenses to take one for job-hunting deduction. Those miscellaneous expenses would have to be greater than 2% of your adjusted gross income (AGI). (Your AGI is found on line 37 of the regular 1040 form).

If your adjusted gross income was $50,000 for 2009, then you’d need more than $1,000 in miscellaneous expenses to be able to take any miscellaneous deductions on Schedule A.

Luscombe said job-hunting expenses can include resume printing, postage, faxes, long-distance calls and unreimbursed travel, including air, taxi and rail as well as mileage and tolls, and lodging for out-of-town interview trips.

- Did you work through a credit mess and have debt forgiven?

While it’s a relief to see credit card debt or other loans forgiven, it’s a shock at tax time to learn that generally any amount of debt that is settled for less than the amount owed is subject to taxes. Your lender would send you Form 1099-C, Cancellation of Debt, to show you what to report on your tax return.

“Many people are surprised when they get the Form 1099-Cs in the mail, and the IRS indicates that many more 1099-Cs are being sent out,” Luscombe said. A taxpayer should receive a 1099-C if $600 or more of debt is forgiven by a federal agency, financial institution or credit union. Not all canceled debt will trigger taxable income. There are exceptions for such things as insolvency or bankruptcy—and foreclosure.

The Mortgage Forgiveness Debt Relief Act of 2007 allows taxpayers to generally exclude income from the discharge of debt on their principal residence or mortgage restructuring. This won’t help if your mortgage debt involved a second home or vacation home.

- Did your paycheck get smaller?

Nobody is celebrating a wage cut, fewer hours or several months without work. But if last year was particularly rough, you might qualify for the Earned Income Tax Credit. You must have some income from wages or a job for 2009 and earn less than set income limits.

For example, your adjusted gross income would need to be less than $40,463 if you’re married, filing a joint return and have one child who would qualify under the credit. The maximum earned income credit is $3,043 if you have one qualifying child.

The income limit is $48,279 if married and filing a joint return and if you have three or more qualifying children. The maximum credit is $5,657 for three or more children.

- Did your income drop so much that you now qualify for some breaks that couldn’t work for you last year?

Scharin noted families that had college tuition bills in 2009 could benefit on their tax return this year from certain education credits that are not allowed once you hit certain higher-income levels.

The American Opportunity Tax Credit—formerly called the Hope Credit—offers up to $2,500 for qualified tuition and fees paid for each eligible student in the first four years of college. The American Opportunity Tax Credit cannot be used, though, if your modified adjusted gross income hits $90,000 or $180,000 on a joint return.

“Just because you weren’t eligible in the past doesn’t mean you’re not eligible now,” Scharin said. “Don’t assume because the line was blank last year you should leave it blank this year.”

(c) 2010, Susan Tompor, Detroit Free Press.

On Saturday, March 27th at 8:30 p.m. local time, the largest ever public demonstration for action on climate change will take place as lights are symbolically turned off for one hour in homes, office buildings, iconic landmarks, government buildings and retail establishments across the globe for Earth Hour.

Ninety-two countries and regions around the world have now made the pledge for Earth Hour to show the world what can be done to fight climate change. Last year 88 countries got involved in the lights out event.

With confirmation that the Tokyo Tower in Tokyo and Brandenburg Gate in Berlin will both turn off their lights for Earth Hour, all members of the G20 are now taking part in the event.

“Earth Hour is inspiring millions of people all around the world to join together and show their concern for the future of our planet,” said Leslie Aun, WWF’s (World Wildlife Fund) vice president for public relations and the managing director for Earth Hour U.S. 2010. “Here in the U.S., Earth Hour sends a message that Americans are ready to turn out the lights on pollution and climate change and make the switch to energy independence and efficiency.”

The Las Vegas Strip, Mount Rushmore, Sea World, the Empire State Building and the Golden Gate Bridge will join other iconic landmarks from around the world in switching off the lights for Earth Hour. CN Tower in Toronto, Grand Palace in Bangkok, Table Mountain in Cape Town, the London Eye, Hiroshima Peace Memorial and Taipei 101 will plunge into darkness to shed light on dangerous climate change.

Citizens of the United States will unite with individuals, businesses, civil groups and governments around the world including Athens, Bangkok, Cape Town, Delhi, Dubai, Geneva, Hong Kong, Istanbul, Manila, Moscow, Rome, Seoul, Singapore, Sydney, Tel Aviv and Toronto. Communities will come together like never before with cities such as Stockholm and Hiroshima holding their inaugural Earth Hour.

Countries participating in Earth Hour for the first time include: Brunei, Cambodia, Czech Republic, Kosovo, Madagascar, Mauritius, Mongolia, Mozambique, Nepal, Northern Mariana Islands, Oman, Panama, Paraguay, Tanzania, Saudi Arabia, Qatar and the Faroe Islands.

For more information, visit www.myearthhour.org.

As the spring real estate season kicks in and the tax credit deadline for sale agreements approaches, the government is ending a program that has kept interest rates low and housing-affordability levels high for months.

On March 31, the Federal Reserve will stop buying mortgage-backed securities from Fannie Mae and Freddie Mac, returning control of interest rates to private investors.

For months, industry observers have predicted that once government supports are removed, interest rates will rise quickly, pushing many of the first-time buyers critical to housing’s recovery out of the market.

In late summer and fall 2009, lured by fixed 30-year mortgage rates under 5% and the first $8,000 tax credit, which expired Nov. 30, first-timers pushed sales of previously owned homes to the highest levels in at least three years, reducing record inventories and braking price declines.

That tax credit was renewed Nov. 5 and expanded to buyers who had not purchased a property in five years, although the credit for repeat buyers is $6,500. The second credit expires April 30, is unlikely to be renewed, and remains the engine moving buyers.

“Not a single one has expressed concern about interest rates,” said Cheryl Miller of Long & Foster Real Estate in Blue Bell, Pa., acknowledging that “there is, I suppose, a false sense of security regarding rates remaining low.”

As the date for the Fed pullout approaches, analysts now generally agree that an immediate rate spike is no longer the likely result. “We think there will be a significant increase in private demand for mortgage-backed securities to take the place of the Fed,” said David Berson, chief economist at PMI Group in Walnut Creek, Calif. Not enough to offset the Fed’s departure, he said, with rates possibly increasing a quarter of a percentage point, “but a significant one.”

Bankrate.com columnist Holden Lewis said rates are so low now—averaging 4.87% for a 30-year fixed this week—that an increase “is inevitable. But maybe they’ll rise gradually instead of jumping” April 1.

The Fed says it will stop buying “by” March 31 instead of “at” the end of the month, meaning that it likely has reduced its purchases and rates haven’t risen, Lewis said.

Moody’s Economy.com chief economist Mark Zandi said rates will “drift” higher in summer and fall, with the half a percentage point the Fed’s action cut working its way back in—mainly because investors believe the government would return if they got too high. For that reason, Philadelphia mortgage broker Fred Glick said, rates won’t change. “If the old buyers don’t come back, the Fed will intercede again to ensure rates during a continued slowly recovering economy will not go so high as to stymie a positive direction,” Glick said. Buyers of these securities “now see that the lenders have instituted rigorous standards to ensure that the Fannie Mae and Freddie Mac paper they are buying are very good loans,” he said.

On the other hand, said Holland, Pa.-based economist Joel L. Naroff, low rates are not sustainable, and “the only way to get the market to stand on its own is to get people to become realistic again about prices and rates.” Rates will likely rise, but “the level will still be historically low,” Naroff said.

When rates do rise, likely by year’s end, it won’t be because of the Fed’s action, but “natural macroeconomic forces” like a recovering economy and the high budget deficit, said Lawrence Yun, National Association of Realtors chief economist.

The possibility of renewed Fed intervention will likely prevent rate increases resulting from private investors demanding large risk spreads, said economist Brian Bethune of IHS Global Insight in Lexington, Mass. As a result, Bethune and IHS economist Patrick Newport believe, the rate will be at only 5.25% by the fourth quarter.

Many Fed officials have emphasized that “high unemployment and tame inflation warrant a continued promise to hold rates very low for a long time,” said Peter Buchsbaum, of Arlington Capital Mortgage in Horsham, Pa.

Some analysts expect the expansion to ease, “and I am sure the Fed does not want to extinguish the fragile recovery,” Buchsbaum said.

Treasury bond yields “did not move much after the Fed completed its $300 billion in purchases in November,” said Jerome Scarpello, of Leo Mortgage in Spring House, Pa., “meaning they were able to exit and not disrupt that market.” Rates will rise, he said, but not as high as the one percentage point others predict. “With unemployment high and foreclosures an issue, a significant rate increase can push home prices down,” Scarpello said, “and hamper the slight recovery we now have.”

(c) 2010, Alan J. Heavens,The Philadelphia Inquirer.

With the U.S. federal income tax filing deadline of April 15 now just weeks away, taking time to review your tax situation and plan for any needed action will save you time, stress and, quite possibly, money.

With the economic recession impacting so many Americans in 2009, many people will have complicated filing situations this year, says Jeff Staley, president of Freedom Tax Relief, LLC. “This is the time to prepare, review your tax obligations and evaluate your alternatives for payment if you find you may have difficulty in paying your tax bill this year.” Staley recommends taxpayers follow these steps now in order to be ready for April 15:

1. Make a plan for filing. Make plans now to ensure that you will be able to file your income tax return on time. If that is impossible, file an extension. The Internal Revenue Service (IRS) is more forgiving of those who follow the rules than those who skip filing. Even if you cannot pay your tax debt in full on April 15, filing the required forms will result in smaller penalties.

2. Understand tax on unemployment benefits. Unemployment income is taxable. If you received unemployment benefits during 2009, you should have received a Form 1099-G providing the total amount received. If your employer paid separate unemployment compensation, that income should be reported on your W-2 form as income. Note that the first $2,400 of government benefits received in 2009 is exempt from tax, thanks to the American Recovery and Reinvestment Act.

3. Prepare documentation for tax credits. Review your 2009 expenses to know whether you qualify for credits. The American Recovery and Reinvestment Act of 2009 (e.g., stimulus package) included many tax credits, ranging from an expanded health coverage tax credit to new education benefits.

4. Maximize deductions. If you made donations to nonprofit organizations in 2009, make sure you obtain needed appraisals or valuations to list these contributions accurately in your tax forms, per IRS guidelines.

5. Contribute to your retirement plan. If you plan to contribute to a retirement plan, you can still make tax-deferred contributions for 2009 until April 2010.

6. Estimate your payment. You can estimate your tax obligation by reviewing a copy of last year’s tax form, completed with your 2010 data. If you purchase tax return software, you can use that. Or go to www.irs.gov and download a PDF version of your form to fill out.

7. Plan for payment. If it looks like you will have a larger tax bill than you can afford to pay in full by April 15, the IRS suggests taxpayers find any means possible to pay that bill, including bank loans, cash advances on credit cards, using savings, borrowing against retirement or life insurance, or using equity in assets (such as a home) to pay. However, if you are in dire financial circumstances, exchanging one debt for another will not make things easier, and putting a home at risk is almost always a bad idea. Consult a tax and/or financial adviser before making a decision.

8. Evaluate your alternatives. If you will absolutely be unable to pay your tax bill, contact the IRS. The agency sometimes gives some leeway to taxpayers who contact them directly or pay a late bill voluntarily. The IRS might waive penalties for those who cannot pay because of a death in the family, serious illness, financial records lost in a natural disaster or another “reasonable cause.”

Another alternative is tax debt resolution. Tax resolution specialists can often negotiate directly with the IRS on behalf of consumers who owe $10,000 or more. These specialists usually are attorneys, enrolled agents or certified public accountants with special training and experience. They can navigate the maze of IRS forms and calculations, help consumers understand what the IRS wants, and help them resolve their tax debt.

“As the April tax filing deadline looms, it is time to face up to the demands of the IRS and determine a payment strategy for your tax bill,” says Staley. “In these economic times, it is good to know that help is available for those who need it.”

For more information, visit www.freedomtaxrelief.com.

Liv Mansfield is racing the clock, hoping to find and settle, or at least sign a purchase agreement, on a townhouse before the $6,500 tax credit for qualified repeat home buyers expires April 30, 2010.

While the credit is not as important as staying in the Wallingford school district, where her younger daughter will enter sixth grade next fall, Mansfield says it will help make expenses associated with the move ‘a wash.’ “It will help with moving costs, and with getting this house ready for sale,” said Mansfield, who has lived in the five-bedroom split-level Colonial she bought with her former husband nine years ago.

The house, which she says is far larger than what “two people and a small dog need,” will list for under $525,000 and heads for the market Feb. 15, 2010.

Current homeowners buying a house between Nov. 7, 2009, and April 30 and who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight can qualify for the $6,500. It seems less is known about the repeat buyer credit. This incentive was added when the original $8,000 tax credit for qualified first-time buyers, which expired Nov. 30, was extended.

Houses purchased for $800,000 or less are eligible for repeat buyers. Single buyers with incomes up to $125,000 and married couples up to $225,000 may receive the maximum tax credit for both repeat and first-time purchases. The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Buyers earning more than the maximum are not eligible for the credit. If a binding written contract to purchase is in effect April 30, the purchaser will have until July 1, 2010 to close.

The 2009 credit for first-timers helped jump-start the sagging home market in the summer and fall, data show. Walt Molony, a National Association of Realtors (NAR) spokesman, said two million existing-home sales in 2009 could be attributed to the $8,000 first-time buyer credit. Although it is too early to measure the credit’s effect on sales so far this year, Molony said NAR chief economist Lawrence Yun believes it will add 1.5 million sales to the tally.

The repeat-buyer credit was added to appease builders, who said the original did not offer enough time to purchasers of new houses, which take at least six months to build, to close on them. New homes accounted for only 7% of the tax-credit-based sales, Molony said.

The National Association of Homebuilders’ Donna Reichle said, “We hear builders saying they are getting inquiries, but that’s all so far. According to our economists, it’s way too early,” Reichle said. “If you look back at the passage of the original $8,000 credit and impact on housing starts, it took a couple of months, and that was in the spring as well.”

Moody’s Economy.com chief economist Mark Zandi says the credit will boost sales “modestly,” however, by 300,000, with one-third trade-up buyers. “I don’t expect the credit to be extended again,” Zandi said. “Each time it is extended, it becomes less effective and thus more costly.”

David Krieger, senior vice president and general manager of Coldwell Banker Preferred in Philadelphia, says he believes that “a very large increase in our listing inventory in January is a result of the $6,500 credit.” Still, the $8,000 first-time credit remains the chief reason his company’s home sales were 33% higher last month than in January 2009, he said.

Typically, repeat buyers are better off financially than first-timers, so a lot of repeat buyers realize from the start they don’t qualify for the credit, Weichert Realtors agent Alec Schwartz said. “What they do realize, and what is getting more sellers to list, is that they understand that there are plenty of first-time buyers who qualify for the $8,000 credit out there, and they have a much better chance of selling their house and buying a new one than before,” said Schwartz, Liv Mansfield’s agent.

This is also true in the region’s new-home market, said Wayne Norris, regional sales manager for Hanley Wood Market Intelligence. “Builders have experienced increased activity in recent months” attributable to the $6,500 credit and “the fact that many potential buyers were able to sell their houses” to those taking advantage of the first-time buyer credit,” he said. The sense of urgency to make the tax-credit deadline and fears of rising interest rates will push new-home sales higher in the spring, Norris said.

(c) 2010, By Alan J. Heavens,The Philadelphia Inquirer.