Brooklyn Real Estate Q&A and Info

Many real estate investors who own investment and business properties in Brooklyn, New York are not aware of the opportunity to save thousands of dollars in capital gains taxes by using a 1031 Exchange, which allows you to exchange rather then sell your capital assets.

Under Section 1031 of the Internal Revenue Code (IRS), a ”Like Kind Exchange” allows an investor to defer federal capital gains taxes when business or investment real estate or personal property is exchanged rather than sold.

What Are Like Kind Properties?

In order to qualify as a tax-deferred exchange, the Relinquished Property (the property you want to exchange) and the Replacement Property (the property you want to acquire) have to be of “like-kind”.  Real estate must be exchanged for other real estate and personal property must be exchanged for other personal property.  In the case of real estate, the type of property is not important.  Land, office buildings, apartments, rental homes and condominiums are all real estate and qualify as “like-kind” property.

The Qualified Intermediary

In order to satisfy the requirements imposed by the IRS for a valid 1031 exchange, you must have a qualified intermediary to facilitate the exchange. What does that mean? Before you put the property you want to exchange under contract, you are required to find a person or entity to act as a qualified intermediary, also called a facilitator or accommodator, who is a neutral party that takes possession of the proceeds from the sale of your property, uses the funds to purchase the new property, then transfers title of the property to you. (Please consult your attorney)

Time Requirements

According to Section 1031 you are required to identify potential Replacement Property(ies) within 45 days after the closing of the Relinquished Property. Generally you are limited to identifying three potential Replacement Properties.

In addition, an you must acquire the Replacement Property(ies) within 180 days of the closing of the Relinquished Property. Failing to meet either of these time requirements will prohibit your ability to defer any capital gains tax using a 1031 exchange.

To Sum Things Up

If you are an investor that owns one or more investment properties, look into a 1031 exchange the next time you want to sell a property.  It could save you thousands of dollars by letting you defer capital gains taxes to a future time, in theory until death potentially avoiding them all together, which makes a 1031 exchange  a wise tax and investment strategy as well as an estate planning tool.  

If you are a first time home buyer in Brooklyn, New York (or anywhere for that matter) who is shopping for your first home and need to get a mortgage to pay for it, you’ll want to know about a Good Faith Estimate. 

What exactly is a good faith estimate and why should you absolutely want one?

A Good Faith Estimate is an estimate of all the costs associated with a mortgage.  These costs include your interest rate, any points, and lenders fees.   If you go to a loan officer at a local bank or a mortgage broker and he or she qualifies you and quotes you a rate, a payment, and your total costs, he should be able to give you a good faith estimate in writing on a standard form.

Don’t find out about some hidden fee or the fact that the rate quoted you was for an adjustable rate mortgage at closing.  By law, your lender must provide you with a good faith estimate, be it an FHA or conventional one, so it is important that you obtain one and read it carefully.  If there’s anything on it you don’t understand, ask your loan officer to clarify it.

In 2010 new laws will go into effect making the good faith estimate even more informative for borrowers.  Take a look at this New York Times article for more details.

After you’ve read your good faith estimate carefully and you’ve gotten a good explanation of all the charges on it and you’ve found them to be acceptable, you can be confident that you won’t get any unpleasant mortgage related surprises later on.

If you want to sell your Brooklyn house as quickly as possible and for the best possible price, your home must make a good first impression.  One of the things that can make or break that first impression (or curb appeal), is your lawn. 

Nothing says “neglected house” like an ugly lawn that’s full of weeds and bare patches.  Here are few tips that you can use to get your lawn in tip top shape and greatly improve your Brooklyn home’s curb appeal.

1. Clean Up Your Lawn - Take some time to rake up any leaves, dead branches and other debris.
2. Check for Compacted Soil – Look for areas in your lawn where there is standing water that doesn’t drain or areas where the soil looks hard.   Use the screwdriver test.  If you can’t easily push a screwdriver into the soil, its compacted.
3. Aerate Your Lawn – Lawn aeration is the process of reducing soil compaction by punching holes in the soil either with a hand tool, a pair of spiked aerator shoes, or a mechanical aerator.    Aeration helps your lawn by increasing oxygen in the soil, which stimulates root growth and helps fertilizer get down to grass roots.
4. Repair – Fill holes with quality topsoil and add grass seeds. Cover the area where you’ve newly added grass seeds with a thin layer of straw.  The straw will protect the grass seeds from birds, and help keep the soil from drying out which creates a hostile place for seeds to try and grow, and it prevent the seeds from being washed away with the rain.
5. Hydrate - It’s been recommended that you water your lawn irregularly, rather than on a strict schedule.  Irregular, when necessary, watering replicates natural weather patterns and makes your lawn more drought-tolerant.  
6. Mow – Always mow when the grass is dry and the blades are upright. Never cut more than 1/3 of the grass blade length at any one time. Grass needs the surface area of the blade to stay healthy. Try to change the mowing pattern periodically. Grass develops a grain based on the direction it is cut. Alternating the pattern will result in an upright growth pattern. Leave grass clippings on the lawn so nutrients and nitrogen are redeposited into the soil.

These methods for improving your lawn takes time.  If you need to get your lawn looking its best in a hurry, consider have new sod laid down.

Question:  I have signed, accepted offer on a property, the Real Estate Agent is holding an Open House this weekend.  Can the seller sell to someone else, like someone from the Open House?

Answer:  The short answer to this question is yes.  Until there is a Contract Of Sale drawn up and signed by both the seller and the buyer, the seller can sell his property to whomever he or she chooses.

Oftentimes, even though there is an accepted offer, the Real Estate Agent will continue to show the property.  There are times when a contract is never signed (executed), such as when the terms of a contract are not acceptable to the buyer.  

For buyers - If you find out that a house you really want has an accepted offer on it, don’t hesitate to put in an offer of your own.  Hey, you never know.

For Sellers - let your Realtor(r) continue to show your property to interested buyers even though you have an accepted offer.  It can be a week or more before a deal is ”pronounced dead”, so its in your best interest to continue to have your property shown, just in case.  Once again, you never know, the person who will end up buying your property may not be the first person whose offer you accept.

You are invited to a First Time Home Buyer’s Seminar.

Weichert Realtors HP Greenfield
1712 Utica Avenue
Between Avenue H & I
718-692-4444
Saturday, May 16, 2009 from 1:00 pm – 2:30 pm
Wednesday, May 20, 2009 from 7:00 pm – 8:30 pm

Find out why it’s the best time to buy a home in 40 years!  You’ll learn about the Free $8,000 First Time Home Buyers Tax Credit for 2009.  You’ll learn the home buying process from open house to closing.  How to get a mortgage and so much more.

Refreshments will be served.

I look forward to seeing you there, and don’t forget to say that Elaine sent you.

If you need more information please feel free to give me a call at the number below or send me an email by clicking here.

One of the first things I did when I moved to Clinton Hill, Brooklyn was get a parking ticket.  I got another a few days after that, and my car was completely towed away one bright and sunny Monday morning when I parked my car the night before near St Joseph’s College on Vanderbilt Avenue and didn’t move it by 11:00 am.

Well, here’s some good news for anyone who has a car who is looking to move to Fort Greene or Clinton Hill (and for people who already live here).   The DOT is reducing alternate side parking from 4 days a week to only 2 days a week.   Hurray!

In preparation for the new regulation,  starting Monday, May 18, 2009, Street Cleaning/Alternate Side Parking Regulations will be temporarily suspended in the Fort Greene and Clinton Hill sections of Brooklyn’s Community District 2 for approximately six to eight weeks while  2,000 new signs are installed with the new reduced regulations.

The area that is getting the new regulations are within the borders of the following:

North: Flushing Avenue (included) from Navy Street to Classon Avenue.

East: Classon Avenue (included) from Flushing Avenue to Fulton Street.(the true border of Clinton Hill and Bedstuy)

South: Fulton Street (not included) from Classon Avenue to Flatbush Avenue.

West: Flatbush Avenue (not included) from Fulton Street to Myrtle Avenue; Myrtle Avenue (included) from Flatbush Avenue to Navy Street; Navy Street (not included) Myrtle Avenue to Flushing Avenue.

This is another great reason to call Clinton Hill and Fort Greene home.  DOT, myself and my soon to be purchased Caddy CTS thanks you.

So, you are ready to sell your Brooklyn house, co-op or condo apartment and the value of property in your area has plummeted.  There’s a little glimmer of hope of a market recovery, but nothing concrete.   How do you sell your property for as high a price as possible?  Here are three tips.

1. Adjust your mindset.  You are no longer an owner, but a seller, and as a seller you need to take personal preference out of the equation and walk through your property with the eyes of a buyer.  Ask yourself a few questions.  Will turquoise walls with purple trim appeal to most potential buyers?    How about your Pirates of the Caribbean themed bedroom?
2. Are There Obvious Obstacles To Getting Full Asking Price?  When you’ve lived somewhere for a long time, you get used to things.  Ask yourself.  Will those cracks in the walls you’ve been telling yourself don’t look so bad effect how buyers view the value of your property?  What about those stains on the ceiling from a roof leak?  Sometimes you have to spend some money to make more money.  Do necessary repairs.
3. Get a Fresh Pair of Eyes to Evaluate Your Property.  Talk to a local Realtor(r) and have him or her tell you how you can maximize the value of your property.

Follow these three tips, and you will be well on your way to selling high in a buyers market.

If you would like your property evaluated before you put it on the market by a “fresh pair of eyes” give me a call at the number below or click here to email me.

One of my favorite expressions is “knowledge is power”, and there’s no better way to empower yourself then by learning how to make your Brooklyn home sell for more money. A great way to do that is by watching television.

Of course, watching CSI or Heroes won’t help you, but turning your television to HGTV will.  HGTV has fantastic programming that will help you learn how to sell your Brooklyn house, coop or condo more quickly and for money.

Television programs like HGTV’s Designed To Sell is a wonderfully educational and sometime entertaining program that shows you how for $2,000 or less you can increase the salability and even the selling price of your property by making a few smart upgrades and decoration changes.  HGTV also has a great program called The Stagers which gives you a glimpse inside the world of professional stagers along with tips and touch up ideas that can make your home more sellable.

The program The Unsellables on HGTV shows you how problems like clutter, uncleanliness, pet odors and general poor maintenance of your property can make your home more difficult to sell then is has to be.

There are several other programs on television today that can help you get ideas on how to make your Brooklyn New York home a little less personal and a lot more appealing to the most buyers, making it easier to sell.

So grab a snack, turn on your television and learn some of the easy and inexpensive things you can do to get your home to sell for more money.