I received a call-to-action email from another Minnesota agent yesterday. I wanted to share portions of that email with my readers. Its troubling, segments of the Minnesota government appear to be trying to solve their financial problems by harming the housing market just as it is getting a foothold again. We may be able to stop this disaster from passing by contacting our legislators. Read on:
On Monday, the Minnesota House of Representatives Tax Committee released a "delete all amendment" to HF2323 and added provisions that are negative for real estate in the Omnibus Tax Bill. Authored by DFL Representative Ann Lenczewski, it contains a number of tax law modifications that hurt all Minnesota home owners.
Since 1992, even with all of the Budget Shortfalls Minnesota has faced, the government spending has increased each and every year. In fact, Minnesota State spending has gone from $14.5 billion in 1992/93 to $34.6 billion in 2008/09 - that's a whopping 138 percent increase.
To resolve the budget shortfall, the House/Senate DFL plans focus on raising taxes and reduce spending. Governor Pawlenty has proposed a plan focused on reducing spending and raising revenue without raising taxes.
HOUSE TAX BILL HURTS REAL ESTATE. The DFL House Tax Plan raises revenue by cutting a number of income tax deductions. Of significant concern to Minnesota REALTORS® and homeowners, the DFL House plan eliminates two major real estate tax deductions: the Mortgage Interest Deduction and Real Estate Property Taxes. The bill also eliminates provisions of the Relative Homestead Tax.
Elimination of Mortgage Interest Deduction (MID)- a feature of the tax code since 1933, the MID has helped numerous generations achieve the American Dream of owning a home. A significant public policy objective for decades, homeownership stabilizes families, neighborhoods and communities. The House DFL Tax Bill eliminates the MID for homeowners and replaces it with a "housing credit" for qualified homeowners. The maximum credit is $420, which is equal to 7 percent (7%) of up to $6,000 of mortgage interest paid during the taxable year. However, no credit is applied to the first $4,000 of interest paid.
This provision hurts young families disproportionately because mortgage debt loads are highest when people are establishing their households. This provision changes the financial plans numerous families have made when purchasing a home and increases the financial difficulties many are facing during this economic downturn. At a time when housing is finally getting a financial foothold why eliminate a tax provision that has helped millions of families achieve the "American Dream?"
Real Estate Property Tax Deductibility-This public policy provision has been included in the tax code since 1933 and allows taxpayers to deduct property taxes paid from their income. The House DFL Tax Bill eliminates the deductibility of real estate property taxes at a time when local property taxes continue to increase faster than Minnesotan's income.
Relative Homestead - If you own identical houses, with identical values, with identical tax rates you would assume you would pay identical taxes - Right? Not if the House DFL Tax Bill becomes law. In a provision of the bill, authored by a DFL legislator, families that provide housing to other family members will pay more taxes on the second home. The goal of the provision, as stated by the legislator, is to stop parents from buying homes for their college students. MNAR pointed out that this is a small piece of the overall program and instead the proposal will be hurting families trying to assist other family members who may have gone through job loss, divorce or other financial difficulties. Isn't it better to have families provide for families instead of government?
ACTION REQUEST: To fight this unbelievable proposal we are asking that you take three steps:
You can access the bill summary (48 pages) here.
There's been a significant increase in home sales in the Twin Cities area. Pending sales are up 21 percent over last year. On the other hand, the median sales price is down about 23 percent since a year ago and over half of all pending sales are distressed properties. For a home seller that may be bad news, but for a home buyer, it is a signal to take action!
If you have been thinking of buying a home, you should take some serious steps toward your home purchase. There are many incentives, in addition to the lowered prices and availability of houses. Interest rates are incredibly low, there is an $8000 tax credit for qualified buyers, and there are plenty of motivated sellers.
And time to get a bargain may be running out. In a quote to the Star Tribune, Scott Anderson, of Wells Fargo & Co., suggested that we are "tantalizingly close" to the bottom of the housing market. Combine that with a reduction in the number of homes on the market, which is down by 14.8 percent, and signs of improvement in other areas of the economy, and it certainly appears that the bottom is near.
So it sounds like its time to jump on these fantastic bargains. If you wait too much longer, the bottom may be a thing of the past! Contact me today to see what I can do to help you find the house of your dreams at a price you once could only dream about!
If you are interested in searching for a home please go to www.chrisprescott.listingbook.com. You can also call (952) 944-1728 or email Chris@MoveToEdina.com.
Little things can make a big difference in selling your home
If your real estate agent suggests that you spend a little time staging your home, you should listen to this advice. While you may love your home as it is, a buyer is looking at your house through entirely different eyes. Staging your home emphasizes your home’s best features while deemphasizing any weaknesses. Staging need not be expensive – there are a lot of little things a home owner can to make a good impression without spending a lot of money.
First, repair anything that needs fixing. It’s easy to live with minor problems for years, but a buyer seeing your home for the first time will notice small imperfections. Let your real estate agent help you do a survey of your home and don’t feel slighted if problems are pointed out to you.
Once everything is repaired, clean your house from top to bottom, even in places you think people will never look. (They will.) Windows, mirrors and hard surface floors should gleam. Clean the grout, not just the tile. If the walls are dingy, refresh them with new paint. Sweep the garage and considering painting the garage floor. Don’t scrimp on lighting. A bright home makes a good impression while a dark home will seem smaller and dingy. Avoid overhead lighting except in work areas. Table and floor lamps give softer shadows.
If a room is crowded with furniture, get rid of some pieces, even if you just move them to the garage. Pack up personal items and knickknacks (you have to pack them to move anyway) including family photos, awards and religious items. Remove fridge magnets and notes. A good rule of thumb is that there should not be more than four items on any flat surface, including floors and walls. Your goal is a home that’s attractive but impersonal, so the buyers can picture themselves living there.
In neutral colored rooms, add a spot or two of bright color (a throw pillow, a vase with fresh flowers, a brightly colored tea pot, perhaps.) Move furniture away from walls into cozy groups, which will make the room seem larger and friendlier.
Your front door is the first thing a buyer sees, so consider painting it a bright, welcoming color. Currently, deep red is popular, but other colors can also work. Avoid primary colors, but chose colors that are in style and that are found in nature. The paint expert at your local hardware store can help you choose. In warm weather, bright flowers outside the front door will increase the ‘welcome’ effect.
Once a buyer makes an appointment to see the house, do a quick cleaning and straightening job. Hang up clothes, put away dishes, toothbrushes and cleaning supplies. Make the beds with matching linens. Dishes shouldn’t be left drying in a rack. Even the bathroom cup should shine. Wipe out all sinks and, for heaven’s sake, put the toilet lid into the down position (unless you think buyers are in love with exposed plumbing.)
The result of a well staged home is a house that should sell for more money and in a shorter time. The time and money you put in to staging will be worth it at closing.
Contact Chris Prescott for some quick staging tips specific to your home.
Many sellers think that spending money on expensive and extensive home improvement projects before they put their home on the market is a good investment. But, remodeling in order to sell for a significantly higher price isn’t always realistic. In most cases, while a big project will probably help you sell your home faster and will somewhat increase the asking price, don’t expect a dollar for dollar return on your investment.
If you are thinking of making expensive changes, talk to your real estate agent before you call the contractor and ask whether your home needs a big remodeling project or just some minor changes.
Home buyers expect a house to be fully up to code, with a working furnace, air conditioner, hot water heater, electrical system, plumbing and a good roof. If there are any problems with these, you’ll need to have them repaired or replaced, unless you’re selling a fixer-upper. This won’t bring you more money, but, improvements such as better insulation and high-efficiency furnaces pay for themselves in long-term cost savings. Buyers know this and will spend extra for a home with these upgrades.
If you decide to redo your kitchen or bath, you can expect to recoup only about 75 percent of the cost. There are some exceptions; If your home has only one or two bathrooms, consider adding another to create a master bed/bath combination.
Basement remodels can be expensive and usually bring in only about 50 to 80 percent of the cost, but a newly redone basement living space is a good place for that extra bathroom or an additional bedroom adding to the square footage – and the price – of your home.
If you are considering expanding living space with an add-on, don’t do it at the expense of outdoor space or that garage. People want a yard for relaxing and socializing and a garage for storage and for their vehicles. Consider instead adding a deck, which is a good investment and one of the few that will often payback more than it costs.
A sunny and efficient kitchen can be a big selling point. Sometimes, replacing the old and worn-out appliances, refacing the cabinets and putting in new countertops may be all you need to do. When redoing a kitchen, putting hand-painted Italian tile backsplash in a $200,000 home won’t increase the price, while expensive touches are expected in a $500,000 house. When you sell, offer to leave the new dishwasher, refrigerator and stove with the home and look for Energy Star appliances when you buy.
If your windows are old and leak heat, consider replacing them with new high-quality energy efficient windows. Don’t bother putting in cheap windows – buyers can tell the difference and you’ll just be wasting your money.
Today, home buyers are looking for bargains. Having a beautiful home will help sell it quicker and for more money. But, don’t put time and money into projects that won’t help sell your home. Some projects are worthwhile and others are not. Know the difference.
Contact Chris Prescott for more information and a home analysis, to see what, if any, improvements would increase your home's saleabilty.
Braemar Arena in Edina Minnesota features three indoor, regulation-size ice sheets. It is operated by the City of Edina and was originally built in 1966. At that time there was only one rink, but has since grown to three due to the growing demands of Edina's hockey community. The arena offers open skating, group rental, adult and youth hockey and figure skating programs.
The Edina Hornets, which is the high school hockey team, is housed at the arena. It is also home to the Braemar-City of Lakes Figure Skating Club.
For more information, please visit the Braemar Arena website.
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I live, work and play in Edina and the southwestern suburbs of the Twin Cities. Please give me a call at (952) 944-1728
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