Bill Sands

You know that the economy is bad when the rich are holding off in buying fine Art and Real Estate

In a recent reports on the Art World Fine Art Sales are down. Is this a direct response to the Wall Street crisis and the lack fat bonus checks for members of the financial world?
The auction houses have yet to issue their end-of-year round-ups of sales results, but since publicly traded Sotheby's posts its totals online, we can do the math: Sales in 2008 totaled $4.83 billion, only a 9% drop from the $5.33-billion sale total for 2007.
If that doesn't sound too troubling, it's because year-to-date 2007 sales didn't overtake 2008 sales until November. The sales total for November and December was $752.21 million in 2008, a vertiginous 54% drop from the $1.64 BILLION in 2007. November contemporary art sales in New York, Sotheby's, suffered an even steeper decline---62%, from $418.32 million in 2007 to $160.94 million in 2008.

It had been reported that when the honchos of Wall Street would receive their multi- million dollar bonuses like stimulus checks for the rich, they would go out and buy a larger New York City Apartment, a vacation home and art usually contemporary art.

As cash flow tightens and the economy worsens, many people have been forced to change the way we live and play. Recently I evaluated my personal finances and cash flow to see how I could cut corners and improve my cash flow. One of the first areas was my utilities, I contacted my cable and Phone Company's "customer service" department which incidentally has been renamed "customer retention" department. With little or no effort on my part the representative was able to offer me a new rate structure saving me hundreds of dollars collectively per month! The next area I concentrated was my attic, closets and garage. When times are good, and money is flowing we impulsively buy "stuff" even if we do not need it. The "stuff" winds up in storage and we forget its there. If you are like me, you even move it from corner to corner in the garage to make room for more ‘Stuff"! Enough I said to myself, this is away to clean out my garage and liquidate my "Stuff" into cash. I went to EBAY before Christmas and to my surprise discovered that EBAY was offering 10% off Purchases. I assumed that the EBAY was not exempt from the economy and this was their way to create a stimulus for EBAY enthusiast to make purchases. I researched the type the sales records for the items that I was selling and found that no one was bidding. Not wanting to spend money to list items that may not sell, I looked for alternative ways to sell my "stuff". I turned to an old favorite Craigslist and found that the buyers have migrated here. The site offers buyers and sellers a cost free method to socially network with one and another and sell their stuff. I posted and few items and sold them immediately. Buyers like the idea of buying locally since they save the fees, and can also save on shipping cost. Its no secret that the economy has increased the cost of shipping goods. There is also a GREEN movement that believes that recycling our stuff save our landfills which has made Craigslist popular with so many people. Is Craigslist the New EBAY? I still like EBAY but Craigslist has become my new favorite. I use it to market my vacation rentals, fill job opening for my business, and I even post my new listing there! My experience has been outstanding. I am selling my "stuff" , and actually Craigslist has been an excellent source in finding Buyers for my listing, and people eager to find a vacation destination..

Recently Bill Sands, Broker of Sands & Company Real Estate of Wyomissing, Pa. spoke to Newsweek regarding Facebook and other social networking platforms and how Realtors can tactfully use these mediums to keep in touch with old friends, classmates, clients, neighbors and in a indirect way, ppropagate possible real estate sales leads.

Sands stated, you most be carefull not to miss use these "social" platforms to solicit your friends who are not currently in the market to buy or sell real estate.

The important message, is to Brand your self as a professional, educated, well versed individual espcially in the world of technology. Lets face it, you must keep up with the trends, first their was the emails, and Internet, then the cell phone, followed by texting, now its blogging, and social networking.... whats next!!

Sands stated in a recent interview, that he has found a unique way to keep in contact with his old clients in a personal way. Before, he would send letters, postcards, calendars, and holiday greeting cards through out the year. This was a cumbersome, time consuming, and expensive proposition when you have a client base of several thousand past clients over the course of 25 years of business. Now he can see his clients children grow up, see images from thier family vacation and vice -versa. You can comment and have something of personal sincere interest to talk about other then real estate. It's like a continuation of the relationship in a personal way that you share while you are working with them. Before it was hard to do. Bill is re-inventing himself, his websites www.PaRealEstate.com and his Vacation Rental site for his properties in the United States Virgin Islands www.CondoStThomas.com to include blogs and connections to Facebook.

Bill Sands is telling his associates to add Social networking to their client profile. Most Clients have a Facebook account. Ask and you shall receive the key to perpetual relationship with your clients.

Since they have accepted you as their friend, you do not have to worry about the "do Not call" after the one year from transaction rule either.

For more information call Bill Sands at 610-376-9999

Read the Newsweek article click on the Link:

http://www.newsweek.com/id/178344

11 Home Buying Mistakes-

•1. Not getting pre-qualified and pre-approved. Being pre-qualified gives you a general idea of how much you can afford. Being pre-approved means a lender has verified your information and credit rating and agreed to provide you with a specific loan amount. You are in a better position to go house hunting knowing exactly how much you can afford. A buyer who already has a mortgage approval is a much stronger buyer than one that hasn't begun the step of talking with a lender yet.

•2. Overbuying. You may qualify to borrow more, but can you afford to? Analyze your monthly costs: debt, food, transportation, entertainment, and savings. As a general rule, your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Be sure to budget enough to cover closing costs (six percent of the home's purchase price), plus moving, redecorating and maintenance. Allow for increases in ongoing expenses such as utilities and taxes etc.

•3. Misplacing your trust. No matter how much you like the agent, sellers, inspector, or the guy down the block who vouches for them, remember this is a business transaction. Your decision is binding. Do your own research and know your support team's roles and responsibilities.

•4. Skipping the fine print. You need to understand what you're signing before you pick up a pen. Ask for documents in advance, make time to read them and ask questions. Get copies of your mortgage papers a few days ahead of closing. If your not sure get professional advice from a lawyer before you sign.

•5. Relying on oral agreements. Get it right and get it in writing. Written agreements almost always trump oral ones when it comes to contracts. If the offer says the lawnmower is negotiable, but the agent says it's included, get it in writing.

•6. Making an unconditional offer. Protect yourself with at least two of these contingencies in your offer:

•· Mortgage financing - You're pre-approved, but is the house? Before a bank will lend you money, it will want a formal appraisal of the property to confirm that there is sufficient equity in it to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.

•· Inspection - Never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.

•· Insurance - Confirm you can get adequate coverage. In some areas, it's difficult to get hazard insurance.

•7. Not doing proper research and preparation.

•· Know the neighborhood. Remember you're not just buying a house; you're also buying a location. With a Realtors help, a home buyer can find out about the quality of schools, the crime level and upcoming zoning issues.

•· Make a proper offer. Don't base your offer on the seller's asking price. Instead, get a comparative market analysis from the Realtor. This analysis will reveal recent asking and sales prices of similar homes in the neighborhood. With this, a wise home buyer can make an offer that is comparable. This report should not got beyond six months back.

•8. Having buyers remorse. No place is perfect. There will always be surprises. Don't let a few initial blips spoil the whole ride. And don't miss a great house waiting for the perfect one, or waiting for a better interest rate!

•9. Not checking out the builder's reputation on a new home. Talk to three or four people who live in the builder's homes and see what they have to say. If one builder did all the houses in a neighborhood, talk to the residents and get their input. Is your builder a part of a home builders association? If yes, ask the organization about the builders reputation in the industry. Last but not least, check with your local court house for judgments that could be placed against the builder which usually only happens at a resale problem.

•10. Buying a house that is tough to resell. Many home buyers stay focused on finding a home where their families will be happy and safe. You should also remember this is also a big financial investment. Take a moment to look ahead to the day you'll sell the house. Knowing the neighborhood and paying attention to marketable details of the house will go a long way toward preventing a buying mistake.

•11. Forgetting or betting on resale. Avoid buying a home that costs 50 percent more than neighboring homes and think before buying the most expensive home on the block. Your neighbors lower home values will weaken yours. Remember, markets change. If you buy intending to flip your investment and the market falls and you have to sell, your selling price may not be enough to even cover your mortgage.

First Time Home buyer Tax Credit

Frequently Asked Questions About the First Time Home Buyer Tax Credit

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

1. Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home - new or resale- are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purpose of the tax credit, the purchase date is the date when closing occurs.

2. What is the definition of a first time home buyer?
The law defines "first time home buyer" as a buyer who has not owned a principal residence during the three year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first time home buyer.

3. How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first time home buyer tests.

4. What types of homes will qualify for the tax credit?
Any home purchased by an eligible first time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single family detached homes, attached homes like townhouses and condominiums, manufactured homes (aslo know as mobile homes) and houseboats.

5. Instead of buying a new home from a home builder, I have hired a contractor to contrust a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purpose of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

6. What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (know as "adjustments" or "above-the-line-deductions"),but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040 EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI) add to AGI certain amounts such as foreign income, foreign housing deductions, student loan deductions, IRA contribution deductions and deductions for higher education costs.

7. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.

8. Can you give me an example of how the partial tax credit is determined?\
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To multiply $7,500 by 0.5. The result is $3,750.

Here's another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0 the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.

Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

9. Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing seperately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.

10. Are there any circumstances for the buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.

11. I heard that the tax credit is refundable. What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involes the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would recieve a check for $6,500 ($7,500 minus the $1,000 owed).

12. What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer's tax liability would be reduced by $1,125 (15 percent of $7,500) or lowered from $7,500 to $6,375.

13. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.

14. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.

15. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principle residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

16. Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

17. Why must the money be repaid?
Congress's intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.

18. Because the money must be repaid, isn't the first time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the homeowner saves up to $4,200 in interest payments over the 15 year repayment period. Compared to $7,500 financed through a 30 year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.

19. If I'm qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occured on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

20. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

21. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Yes. Prospective home buyers who blieve they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raiding his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their emplyer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the indivdual would be liable for repayment to the IRS of income tax and possible interst chatges and penalties.