Brooklyn Real Estate Q&A and Info

Well, its March 15 and we taxpayers only have 30 more days to file our tax returns. Besides having a wonderful places to live, the homes we’ve purchased, whether it is a house, co-op or condo, allows us to get the benefit of several tax deductions and tax credits. Here’s a list of tax credits and deductions available to homeowners for the 2009 tax season.

Mortgage Interest Deductions – If you took out a mortgage to purchase your home, or you have a Home Equity Line of Credit, then each month you are paying interest to a lending institution. That interest that you’re paying is tax deductible. In order to take the deduction you will have to itemize on your tax return. What you will need to take the deduction is form 1098 that you should have received from your lending institution, and the schedule A form to file with your 1040 or 1040A.

Real Estate Taxes – You can also write off the real estate taxes you pay on your property. What you will need to take the .
deduction is the amount of real estate taxes you paid for the year (if you have a mortgage the amount should be included on form 1098) and again you will have to itemize (use form schedule A).

First-time Homebuyer Tax Credit – If you did not own a home in the 3 years prior to buying one in 2009 or you purchased a home in 2010 (you must be in contract on or before April 30, 2010) then you may qualify for an $8000 First-time Homebuyer Tax Credit. The credit is fully refundable meaning that if you don’t owe the IRS any monies, you may receive the entire $8000 in cash.

For more information on this credit and the form you’ll need to file it, go to the First-Time Homebuyer Credit Questions and Answers Pageon the IRS’s website.

Move-Up Buyer Tax Credit – If you have sold the home you lived in for five consecutive years of the last eight years and purchased a new one between November 7, 2009 and July 1, 2010 (you must be in contract on or before April 30, 2010) then you may qualify for a credit of up to $6,500.

For more information on this credit and the form you’ll need to file to get it, go to the First-Time Homebuyer Credit Questions and Answers Pageon the IRS’s website.

Residential Energy Property Credit - If you’ve made energy efficient improvements to your existing home, you can get a credit of up to $1,500. What are some of the improvements that qualify? Take a look at the Energy Star.gov Website for more information.

As you can see from the tax credits and deductions above, owning a home can really benefit your pocket when tax season rolls around. Be sure to consult with your tax profession to make sure you get all of the tax breaks you deserve.

If I had a nickel for every time a buyer told me that they are looking for a brownstone in Clinton Hill or Bed Stuy, I’d be…well you know.

The next question that I always ask is, “what do you mean by a brownstone?” It might seem like a stupid question to some, but the truth be told, different people have different ideas on what a brownstone is. Some call any row house regardless of the material it’s made of a brownstone. Some call any row house that is brown in color a brownstone. Some call a row house with a layer of brown sandstone applied to its façade a brownstone.

Which idea is correct? Well, in Brooklyn New York, and the rest of New York City, the most widely accepted definition of a “Brownstone” would be a multi floor row house that has a façade made up of brown sandstone which, back in the 19th century when this type of construction was popular, was quarried in New Jersey and Connecticut. The stonemasons of that time period were artisans that liked to use sandstone during construction because it was easy to work with and allowed them to create the varied and ornate design elements you see on the exterior of brownstones today.

When brownstones were first build they were single-family homes that typically included a Garden Floor, sometime called an English Basement, that was at ground level which had a front entrance underneath an exterior formal staircase that led up to the “parlor floor” above, and a rear exit door that led to a garden at the back of the house. The kitchen was generally located on the garden floor.

The parlor floor was where guests were entertained and the parlor was usually the most elaborately designed room of the house with a large fireplace with an intricately detailed mantle, beautifully crafted moldings and fantastic hardwood floors. The entrance to the parlor typically had a set of pocket doors that discreetly slid into the walls when opened. The tall windows that looked out onto the flagstone sidewalk in front of the house would be equipped with raised panel shutters that folded into the window frames when not in use.

One of the things I love most about classic brownstones is the gorgeously ornate staircase banisters some of them contain. I find it so exciting when I see an intricately carved wood banister sweeping up to the floors above, especially if it still has its original finish.

Today, most brownstones have been converted to multiple family dwellings with a lot of the original detailing lost to neglect, indelicate care or too many coats of paint. Still, if you are looking to own a home with some of the finest architecture in Brooklyn, then a brownstone might be for you.

Selling any type of real estate during a recession is not an easy task, but you can get a jump on the competition by appealing to potential buyer’s senses when selling your Brooklyn, New York home.

As human beings, our senses can play a large part in our mood and how we perceive the environment around us.  A smell can trigger a found memory, a song can make us happy.  As someone who wants to sell real estate you can appeal to buyer’s five senses in the following ways:

Sense of Sight - Of course you’ll be taking your furniture, accessories and family photos with you when you move, but appealing to any potential buyer’s sense of sight by having a handsomely decorated and uncluttered home, that has been depersonalized so that the buyers can visualize themselves living there, can be the difference between getting an offer and having buyers walk away. 

Sense of Smell - Our sense of smell has the ability to effect mood. A whiff of apple pie or cookies baking can bring up fond memories of a happy childhood effecting how we feel.  Appeal to any potential buyer’s sense of smell and effect his or her mood by making sure that your home smells clean and fresh.

Having cookies baking during an open house seems a little passe to me, and might make buyers think your trying to hide something (like the smell of mold), so easy does it.   A clean home with subtle hinds of fragrance will go a long way.

Sense of Hearing - There’s nothing wrong with your home being quiet during an open house or showing, but soft background music can be soothing and give your place a homey feel.  If its within your control loud music vibrating the walls, televisions blasting, children screaming and crying, and dogs barking should be avoided.  A nice quiet and peaceful atmosphere may not guarantee your house will sell, but it surely won’t be a hindrance like a lot of noise can.

Sense of Taste - Having food available to potential buyers during an open house is something some Realtors(r) like to do, but truthfully its not really necessary.  Most of the time, the goodies aren’t eaten, but if you do decide to have something for buyers to eat I suggest individual wrapped candies or cookies, something that can be eaten on the go and makes very little mess.

I’m very fond of Hershey’s Kisses or bite-sized Hershey’s Chocolate Bars and I might have a bowl full of them set up by my informational materials at an open house (it is to be noted that I eat most of them myself).

Sense of Touch – Most people would object to potential buyer’s touching their stuff, but you do want them to open up closet doors and otherwise feel free to view your property without feeling like they’re intruding.   A great way to accomplish that is by not being at home (or making yourself scare) when your property is being viewed.  It puts buyer’s more at ease because they won’t worry about hurting your feelings if they have a negative comment about your home, and truthfully, I want them to make negative comments so that I can counter them. 

Will appealing to buyer’s five senses guarantee your home will be sold?   No, but any thing that can help is something you should want to do.  I hope you find this article helpful and if you are looking for a forward thinking Realtor(r) to help you sell your property, please give me a call at the number below or send me an email by clicking here.

Well, as many had hoped, the First Time Home Buyer Tax Credit has been extended until April 30, 2010!

To recap what the credit is, it is a dollar-for-dollar reduction in what a taxpayer owes in taxes. For example, if you owe $8,000 in income taxes and you are eligible for the full $8,000 home buyer’s tax credit, you would owe absolutely nothing in federal taxes.

Its still a great time to buy.  Interest rates are still low and housing prices in Brooklyn are either flat are have risen slightly.   If you are looking to buy a house, condo or coop, give me a call and let me help you take advantage of the free money the tax credit represents.

Thanks to the recession, these terms have become common place. Newspapers, news reports, and blogs are all taking about how to buy foreclosures, REOs and especially short sales (which seems to be the buzz word of the day).

That brings up a good question. What is the difference between a Short Sale, a REO and a foreclosure, especially when it comes to Brooklyn, New York? Well here it is in a nut shell:

Short Sale – In order to completely understand the meaning of a short sale, you need to know a couple of other popular real estate terms. To be “upside down” or “underwater” means that a property owner, whether the property is a coop, condo or house, owes more on the property then the property can be sold for at the time.

When a property is being sold as a short sale, it means that the property owner is under water and the lender has either agreed to, or will be asked to agree to, forgive the difference between what a property can be sold for and what the home owner owes.

REO and Foreclosure - I’ve lumped these two terms together because they are the same.  REO is an acronym that stands for Real Estate Owned and it refers to real estate owned by a bank after it has been foreclosed on.  That brings us to the definition of foreclosure.

A foreclosure is when a borrower fails to live up to the terms of a mortgage and the bank decides to exercise its right to sell the property at auction to recover the money that was lent for the purchase.  If no one purchases the property at auction, the property becomes an REO.

Buying a short sale property or a foreclosure is a good way to purchase property at rock bottom prices, but its not for everyone.  If you’d like more information about buying a bank REO or a short sale anywhere in Brooklyn, NY, feel free to give me a call at the number below or Click Here to email me.

With the difficulty some buyers are having getting financing, and Condos and other new constructions in Brooklyn sitting empty, rent-to-own has become an option available for some buyers. But what is rent-to-own?

The rent-to-own scenario, which is also called a “lease-option” requires a potential buyer to pay a down payment of as much as 5% of the purchase price up front and pay rent monthly while they live in the property he or she intends to buy at the end of the lease.

Part of the rent goes to the owner, and a portion of the rent, called a “rent credit”, goes into an escrow account and is later applied toward the purchaser’s down payment when he or she is ready to buy.   The price the buyer will pay for the house or condo at the end of the lease is determined at the time the “rent-to-own” or “lease option” contract is signed.

The PROS

1. Its a great way to get into a house or condo that you like now without having a large down payment.
2. It gives you an opportunity to “try” before you “buy”.
3. It gives you time to make repairs to your credit rating if its necessary.
4. The owner is obligated to sell the property to you at the price agreed upon, even if the property increases in value.

The CONS

1. If you decide not to purchase the property at the end of the lease, you loose the down payment you put into the transaction at the start of the lease, however the rent credit monies that has accumulated in the escrow account is refunded.
2. If the property decreases in value, you are required to pay the price agreed upon at the signing of the lease, even if the property is worth less.  If the property does not appraise for the amount agreed upon, you may not be able to get a loan and fail to be able to close on the deal, again loosing you down payment money.
3. If the owner of the property fails to pay the mortgage and the property is foreclosed on, you may loose all the money put into the transaction.

As you can see, there are advantages and disadvantages to purchasing property rent-to-own.  Weigh the pros and cons carefully, and if you decide that rent-to-own is right for you, find out as much as you can about the owner’s financial situation, vigorously negotiate the price to be paid, and have a Real Estate Attorney thoroughly review the lease option contract before you sign it.

For more information about rent-to-own (lease-option) properties available in Brooklyn.  Please feel free to contact me using the phone number below, or via email.

Here is an interesting article I came across on the WSJ online about seller financing.

Seller financing is when the seller of the property holds the mortgage for the buyer instead of a bank or some other lending institution. If you own your Brooklyn, New York home outright and you currently don’t need the equity from the house, seller financing might be an option for you.

There’s a lot of positive real estate related news this week.  Several real estate market indicators are positive for the first time in a long time.  Take a look:

Exisiting Home Sales Up by 7.2%  according to the National Association of Realtors

New Home Sales Up almost 10% according to the Commerce Department.  That is the biggest monthly change since 2005.

Case-Schiller Home Price Index’s National Composite is up 2.9% in the second quarter of this year over the first quarter. This is the first quarter to quarter increase in over 3 years according to the Commerce Department.

Mortgage Applications up 7.5% last week according to the Mortgage Bankers Association.   30 Year Fixed Rate Mortages average 5.2% and 15 year fixed Rate Mortages average 4.6%.

That’s a lot of good news.  Does this mean we are out of the woods and the happy days of house prices soaring are close at hand?  No, not really.  With national unemployment close to 10% and an estimated 3 million houses going into foreclosure this year alone, the real estate market still has a long way to go before we see wholesale price increases and the booming sales we had before the housing bubble burst. 

However, with interest rates low and housing prices depressed, its a great time to buy if you have the credit score, income and downpayment.  If you’re interested in buying, please feel free to give me a call – 917-544-2662.