Archive for Home Remodeling
In search of an honest man
Similar to Diogenes’ search for an honest man, homeowners want someone to do quality repairs at a fair price. The task appears reasonably easy but if you’ve ever tried to locate someone to fix something, you know just how difficult it is.
Finding a list of companies from a phone book doesn’t mean they’ll be reasonable and reliable, it just means they have a phone and are willing to pay for an ad. Searching on the Internet may direct you to a website that appears to be a local company but really is a marketing company who will sell the lead to a repairman or company who will pay a referral fee.
There are consumer organizations like Angie’s list who rate repairmen and contractors but they usually require an annual membership fee to be able to access the information. There are also services like Renovation Experts or Service Magic that are registries for contractors but they may not be the most competitively priced.
Your best recommendations are going to come from friends, family and neighbors you trust who have actually used the repairmen before and would use them again. The problem here is that you might have to make multiple calls before you can find a friend who can recommend the type contractor you need.
Repairs are a normal part of selling homes and we certainly come in contact with lots of contractors. This experience leads us to understand who is reputable and reasonable as well as who to avoid. As part of our commitment to helping you be a better homeowner from the time you buy your home until you sell it, we’re more than happy to make a recommendation of good repairmen or other professionals you might need. Give us a call…we want to help.
Keep Track of Your Home Improvements
Keep Track of Improvements
People are staying longer in their homes according to the National Association of Realtors and the U.S. Census. Over time, even a modest appreciation could result in a significant gain and homeowners should have a strategy to minimize possible taxes.
Maintenance on a principal residence is not deductible but improvements can add to the basis which can reduce the gain in the sale. Improvements are easily identified if they add to the value of a home, prolong its useful life or adapt it to new uses.
Receipts and other proof, such as pictures, should be kept during ownership and for several years after the sale of the home. They can include the closing statements from the purchase and sale of the home and all receipts for improvements, additions or other items that affect the home’s adjusted basis or cost.
For a principal residence, basis includes the price paid, plus certain acquisition costs and capital improvements made. When the property is sold for more than the basis, there is a gain. Currently, homeowners that meet the requirements can exclude up to $250,000 of gain if single or up to $500,000 if married filing jointly.
A simple strategy is to put documents that affect the basis of the home in one envelope. Any receipt for money spent on the home that isn’t the house payment or utilities, goes into the envelope. Your tax advisor will be able to sort through them to determine the capital improvements.
For more information on determining basis or capital improvements, see IRS publication 523, Selling Your Home.
Remodeling Trends Have Changed In All Markets Including Austin, Texas
When it comes to home ownership the remodeling trends of the recent past appear to have changed. These changes are showing up in the Central Texas housing market as well as other markets . The recent recession has left a permeating lifestyle change, one that has swapped over-indulgence with down-to-earth necessity. In other words, if it isn’t a necessity many people won’t do it.
It is a buyer’s market out there which means that the buyer is in control. Though in some of the Austin, Texas neighborhoods, the resale homes inventory is so well balanced that buyers barely have an advantage. A seller can no longer pass off a roof in poor condition or a faulty wiring system. If a homeowner wants to sell he will either have to make necessary repairs to his home or credit the buyer at closing. Even if the seller has realistically priced his home for it’s condition and acknowledged the market valuations for his neighborhood, many buyers are still able to negotiate a reasonable discount off of the list price.
Remodeling is on the upswing and for the first year since the height of the real estate market, the amount of money spent on remodeling is expected to increase. The only difference is what kind of remodeling is occurring, in other words if it needs fixing it is going to be fixed. Savvy sellers are recognizing that condition does matter to buyers and the better maintained, well groomed home is more likely to win in the resale beauty contest. In the Austin market, selling homeowners will brag about the green improvements such as the appliances with better energy star ratings, double paned window replacements , insulation and siding upgrades, tankless hot water heaters all in the name of energy efficiency because it has finally become a necessity to homeowners.
The days of bigger and better have passed, being replaced with the motto of living within one’s means and embracing the basics, and real estate is no exception to this rule.
Click here to read a recent article from the Wall Street Journal regarding the current state of remodeling.
