Debt Forgiveness and Its Impact on You

If you sold your Hendersonville home via a short sale, you are probably aware of the term “debt forgiveness”.  This is when a lender “forgives” a portion of what you owe on your home so you can sell it for less.  While the lender may “forgive” this debt, Uncle Sam does not.  In terms of taxes, any amount you would have owed but the bank decided not to collect on may be considered taxable income.  Since taxes are due soon (this year’s deadline is Tuesday, April 17, 2012), I thought it would be important to discuss debt forgiveness and its impact on you, the taxpayer.

As I said before, in general, forgiven debt is considered taxable income by the government.  In essence, you were given a certain amount of money when you signed your loan to begin with.  So, when the bank decides to forgive a portion of the debt, it is like they gave you a credit.  This is considered income and must, therefore, be taxed.  However, until the end of this year (December 31, 2012), a homeowner doesn’t have to pay taxes on the forgiven mortgage debt as long as the debt was from a principal residence and the amount forgiven didn’t exceed the original loan amount plus improvements.

This law also applies to foreclosures as well as a loan modification that includes a reduction in your Hendersonville home’s principal balance. The loan modification provision only applies if you are currently using the home in question as your permanent residence.  The non-taxable mortgage debt relief also only applies to the original loan amount.  It does not typically apply to second mortgages or home equity lines of credit that are not used for improvements on your home.

When a portion of a mortgage debt is forgiven, the bank will send out a 1099 to both the Hendersonville homeowner and the IRS that shows the amount forgiven.  You must then file a Form 982 to explain what the debt was forgiven for and why you shouldn’t have to pay taxes on it.  Whatever is taxable should then be filed on your 1040.  Talk to your tax adviser/preparer about this.  They should be able to answer any questions you have.

Rich Cooke, your Western North Carolina real estate specialist

Originally posted on my Hendersonville real estate blog here: http://rich-cooke.com/2012/03/22/debt-forgiveness-and-its-impact-on-you/.

Top Remodeling Projects Buyers Love

With the rocky economy of the past few years, more Hendersonville homeowners have opted to stay in their homes for a little while rather than sell right away.  However, they may still need to make some modifications to their properties as their needs change.  Remodeling has fast become a hot commodity on the real estate front.  Even if you aren’t planning on selling your home right now, you should keep in mind the top remodeling projects buyers love for when you do eventually place your Hendersonville house on the market.

Kitchens
The heart of the home has always been the kitchen.  Hendersonville home buyers still love their kitchens.  It can easily make or break a sale.  Opening up a smaller kitchen, adding more shelving and storage, incorporating a pantry and/or adding an island are all ways to make your kitchen area more useful while you are living in it and more attractive to buyers when it comes time to sell it.

Outdoor Living Spaces
Studies have shown that, even during cold wintery weather, buyers still want an outdoor living space.  It is a natural extension of your Hendersonville home’s usable area.  Adding a deck (one of the best returns on investment, by the way), constructing a built-in barbecue and creating an entertainment area, complete with wiring for stereo and/or TV, are some options you may want to consider when creating your ideal outdoor space.

Smart Home
In today’s high tech society, we tend to be more and more dependent on electronic gadgets to get through our daily lives.  Upgrading your Hendersonville home’s wiring to accommodate this can be very appealing to future buyers as well as make your life a little easier.  This is especially true if you have an older home.  Upgrade your electrical panel so that it can handle a heavier workload.  Since more and more Americans are working from home, make sure your home is capable of utilizing internet service easily from any room.

Elderly Accommodations
As our population ages, our home needs change.  One trend that home builders have found recently is the request to have more elderly-friendly homes built.  Having at least one bedroom and full bathroom (with at least a shower) on the ground level is a popular floor plan nowadays.  Wider doors make it easier to maneuver a wheelchair.  Eliminating steps outside your Hendersonville home make entering less arduous for older folks.

If you’ve decided to sit tight in your Hendersonville home for a little bit but need to make adjustments to fit your lifestyle, keep these top remodeling projects that buyers love in mind before you begin construction.  Even if you aren’t selling your home today, you may eventually want/need to.  Wouldn’t it be better to have invested your money in something that makes it more attractive to buyers in the future?

Rich Cooke, your Western North Carolina real estate specialist

Originally posted on my Western North Carolina real estate blog here: http://rich-cooke.com/2012/03/01/top-remodeling-projects-buyers-love/.

Save Money and Energy This Winter

The warm summer days are behind us.  Western North Carolina in the fall is absoutely breath-taking.  Soon, however, the leaves will fall from the trees and the cold reality of winter will set in.  With the price of natural gas and propane going up, it is important to cut costs as well as energy loss wherever you can.  Since not everyone can afford to go completely green (ie solar or wind powered), we have to find other ways to cope.  If you want to save money and energy this winter, I’ve got a few suggestions for you.

Shop around.  There may be more than one company available in your area to provide natural gas, propane or even electricity to your Hendersonville home.  Ask each company for their rates and compare them to what you are paying now.  Also, check with your current provider to see if they have programs available that you may qualify for.  It never hurts to ask and you may be surprised at the savings you can find.

Insulation.  This can be a relatively inexpensive way to keep you warm during the cold winter weather.  Check the insulation in your attic and walls, especially if you are in an older Hendersonville home.  You may need to add or replace what is currently there to get the most bang for your buck.  Look into purchasing insulated curtains for your windows as well.  These can help keep cold air out and warm air in.

Look for Leaks.  Windows and exterior doors are notorious places for cold air to creep in.  Sometimes, simple caulking or weatherstripping can do the trick.  However, if your windows are especially worn and in need of replacement, buy energy-efficient replacements.  You may even be eligible for a tax credit by doing so.  Storm windows and doors are also great forces against the elements.

Additional ways to stay warm during cold Hendersonville winter months are to use extra blankets and wear warm clothing while indoors.  Add an extra blanket at night or put on a wool sweater instead of turning up the thermostat to help keep your costs down.  Follow these tips to save money and energy this winter.

Rich Cooke, your Western North Carolina real estate specialist

Originally posted on my Active Rain blog here: http://activerain.com/blogsview/2532533/save-money-and-energy-this-winter.

Home Remodeling Projects You Should Focus On

The housing market across the country has undergone a tremendous change over the last several years.  Hendersonville homeowners are looking at ways they can improve or update their home to get the most return on their investment when it comes time to sell it.  According to recent reports, the best projects to tackle around your house aren’t the big expensive ones, but rather the quicker, more affordable projects.  Here are a few home remodeling projects you should focus on that give the best cost-to-value ratio:

Entry Door Replacement – This is an often overlooked part of the home when it comes to updating and maintaining.  It also places the highest in the cost-to-value ratio.

Garage Door Replacement – This doesn’t mean just replacing the old version that you lock up manually and have to open manually.  A motorized garage door appeals to a much wider variety of Hendersonville buyers, especially as our generation ages.

Wooden Deck Addition – Outdoor spaces are a major selling point for buyers, even during the colder winter months.  Having a space ready for entertaining at any time is a must.  A beautiful green expanse of yard is wonderful, but adding a wooden deck can transform your outdoor space into an extension of your home’s living area.

Kitchen Facelift – You don’t have to completely gut and remodel the kitchen to make an impact.  Instead, utilize the space to make simple updates, such as a new paint color and flooring, adding or replacing cabinet hardware and updating the faucet.  Replacing older appliances with newer energy-efficient models will save you money when you purchase them (many Energy Star appliances offer rebates), when you use them (using less energy means you save money on your electric bills) and when you sell them (more and more buyers are looking for energy-efficient homes).

Room Additions – OK, this may sound expensive at first.  However, I am not talking about actually building a room addition onto your Hendersonville home.  This can be expensive and time-consuming.  First you have to draw up the plans, then you need to obtain the proper permits and then you pour the concrete, add the framework and finish it off.  Instead, take existing space (such as the attic or basement) and transform it into extra bedrooms, an office, a family room, that extra roomy master bedroom you always wanted or whatever your heart desires.  Since this area has already been included in the original plans and building process, you don’t have to mess with the expenses associated with actually adding on to your existing Hendersonville home.  And, it adds more functional, usable living space to your home, which can be a HUGE advantage when it comes time to sell.

These are just some of the home remodeling projects you should focus on when updating the look of your Hendersonville home.  Even if you aren’t planning on selling your home this minute, these projects will not only help make your home more attractive to you, but it will also be more attractive to potential buyers and your pocketbook in the future.  When you do decide to sell your Hendersonville home, don’t forget to contact me!

Rich Cooke, your Western North Carolina real estate specialist

Are You Paying Too Much for Your Property Taxes?

Property taxes are one of the inevitable costs of owning your home in Hendersonville.  How much you pay in taxes is determined by the value the county places on your property.  However, since it is not possible for the county to go out and re-assess every property in its jurisdiction every single year, your property taxes may be based on the value your home was assessed at several years ago.  Because property values have declined so much in the last few years, this could mean that you are paying hundreds, if not thousands of dollars more than you should.  How do you determine whether you are paying too much for your property taxes?

While North Carolina law requires each county to reassess the property values in their area every eight years, Henderson County passed a law in 1995 to do so every four years instead.  The last reassessment was done in 2007.  Currently, the county is in the process of reassessing properties to current market value.  If you have recently received the reassessed value of your home, make sure to check over the paperwork to make sure that all the information is correct, including square footage, bathrooms, bedrooms, etc.  This can have an impact on the value your Hendersonville home is given.

If you feel that the appraised value of your home is incorrect (it’s much higher than what you think your home can realistically sell for or it’s not valued similarly to other homes in your area), you can file an appeal.  The first step is an informal appeal.  Included in your reappraisal notice will be a form that you can fill out to file your informal appeal.  Your area’s appraiser will then review the information you provide to determine whether it supports a change.  If the results of the informal appeal are unsatisfactory to you, you can file an appeal with the Board of Equalization and Review.  After that, you can appeal to the North Carolina Property Tax Commission and, finally, the North Carolina Court of Appeals.

When you decide to file an appeal, make sure you have proper evidence to support the reason for your disagreement with the assessed value.  Keep in mind that you can’t use the sales statistics of Hendersonville homes after January 1, 2011 for current property values.  Some good evidence to provide when appealing your property tax assessment include:

1. Your own professional appraisal done based on values before January 1, 2011.
2. Sales report of properties comparable to yours that were sold before January 1, 2011.
3. Report of comparable listings on the market in your area existing on or before January 1, 2011.
4. 2010 income and expense statements if the property in question if an income-producing property.
5. Proof of data errors on the county’s reassessment, including amount of bedrooms, bathrooms, square footage, etc.

While the Henderson County Tax Assessors office does not have the authority to lower your taxes, getting a correct and up-to-date valuation of your Hendersonville property will give you the information you need to speak to your tax collector about it.  If you feel you are paying too much for your property taxes, follow these steps to get a reassessment of your Hendersonville home.  For more information on the appeal process in Henderson County, please call the Tax Assessor’s office at (828) 697-4870.

Rich Cooke, your Western North Carolina real estate specialist

How to Take Care of Your Hardwood Floors

Hardwood floors are beautiful.  Many homes today have hardwood floors installed in them made from all sorts of materials: bamboo, oak, maple, cherry, etc.  They continue to be highly sought after as well.  Whether you currently have them in your Hendersonville home or are considering installing them in the near future, you need to know how to take care of your hardwood floors to keep them beautiful for years to come.

Dirt – Any form of dirt, ie: sand, grit, etc, is a natural enemy of hardwood floors.  Even the smallest grains can scratch or dull hardwoods eventually.  Keep your hardwoods free of dirt by sweeping often with a broom, wet mop or Swiffer sweeper.  Laying area rugs on top of hardwood floors is smart.  But you want to make sure that they are vacuumed and taken outside to shake out any remaining dirt often, since dirt can be transferred from a rug to the wood easily.

Furniture – Anytime you move furniture around without lifting if up first, you run the risk of scratching your wooden floors.  Attach protective pads to the bottom of any furniture legs that come in direct contact with your wooden floor.  These pads can be purchased inexpensively at many home warehouse stores.  They make moving your furniture easier as well, especially if you have difficulty lifting it.

Shoes – High heeled shoes are the worst.  But, any shoes can leave scuff marks or track scratchy dirt across your home’s beautiful floors.  Set aside a place near the entrances to your home so that your family and guests can store their shoes when they enter.

Sun Damage – When wood is left in sunlight for extended periods of time, it can become discolored.  This is especially true for direct sunlight.  Make sure to hang drapes or put up shades or blinds in windows that let sunlight spill onto your floors.

Water – Why do you put a coaster under a wet glass on your wooden coffee table?  To keep it from ruining the wood.  The same goes for water on a hardwood floor.  It can do severe damage.  Anytime you spill something wet on your hardwood floor, make sure to mop it up as quickly as possible and dry the area thoroughly.

Cleaners – Stick to using cleaners that are made specifically for cleaning hardwood floors.  Products with ammonia, petroleum-based products, waxes, soaps, oils and urethane finishes are definite “No-No’s”.  They can leave a residue behind or may even damage your floors.  For a gentle clean, a damp mop may be your best choice. 

By following these simple tips on how to take care of your hardwood floors, they will stay beautiful for a very long time!  If you or someone you know is interested in buying or selling their Hendersonville home, please feel free to contact me.

Congress Approves Homebuyer Tax Credit Extension

In a late vote last night (June 30, 2010), Congress approved an extension of the homebuyer tax credit.  Previously, homebuyers with a signed contract by April 30th had to have their loans closed (through escrow) by the end of business day on June 30th to take advantage of the $8000 first time homebuyers tax credit and $6500 homebuyer tax credit.  Because so many people rushed to get their loans in under the April 30th deadline, there was a huge backlog of loans that needed to be approved.  Usually, two months is plenty of time to close out a loan.  However, the backlog pushed about 180,000 people to the edge of missing out on the tax credit, according to the National Association of REALTORS®.

The tax credit deadline only extends to those people who had a signed, binding contract for their home loan by the end of business on April 30, 2010.  If you bought a home after that, you are not eligible for either tax credit.  For those homebuyers who had their contracts under way by April 30th, you now have until September 30, 2010 to close escrow to still be eligible for the $8000 or $6500 homebuyer tax credits. 

Now that congress has approved the homebuyer tax credit extension, many homebuyers can breathe a sigh of relief.  Even if you missed out on your chance to take advantage of the tax credits, it’s still a great time to purchase your dream Hendersonville home.  Home prices are very affordable, a variety of different types of homes are available and interest rates remain at historical lows.  Just contact me today!

Government Program Eases Short Sale Process

A new government program helps ease the short sale process.  The Home Affordable Foreclosure Alternatives (HAFA) program has set new rules that make the long, arduous process of a short sale much more streamlined and effective.  How is this possible?  For one thing, HAFA offers mortgage companies incentives to participate in their program.  If you are in danger of foreclosure, have tried a loan modification through the HAMP program but have not been successful and need to sell your home for less than you owe before the bank takes it back, the HAFA program may be able to help.

Previously, homeowners didn’t know the minimum amount a bank would accept.  So, they would put their home on the market at a price they thought was OK and had to wait for the mortgage company to approve or reject the offer.  This process could take several months.  But through the HAFA program, homeowners are allowed to get a preapproved agreement from the bank on the terms they are willing to accept.  Another great outcome through the HAFA program is that the lender also must accept the proceeds from the short sale as payment in full for the seller’s loan.  They cannot try to collect the remaining balance after the sale is completed.

For homeowners to qualify under the HAFA rules, the property must be their primary residence, they have tried to do a HAMP loan modification, the mortgage was originated before January 1, 2009, the homeowner is either delinquent on payments or is in danger of foreclosure, the monthly mortgage payment is more than 31% of the homeowner’s gross income, the balance of the loan is under $729,750 and the homeowner can prove hardship.  Only mortgages guaranteed by Fannie Mae or Freddie Mac will be considered.

Take advantage of the HAFA government program to ease the short sale process.  If you are looking at purchasing or selling a home in a short sale in the Hendersonville real estate market, please contact me today.  I can help you!

The Most Bang for Your Buck in Remodeling Projects

If you’re like alot of people nowadays, you may not be able to sell your Hendersonville home right now.  Instead, you are looking at updating your home’s look for the possibility of making a larger profit later.  Here are a few tips on how to get the most bang for your buck in remodeling projects:

1. Crown Molding – Easy to install, adding crown molding to the ceiling or a chair rail along the wall can instantly transfer a drab room into a fab room.  You can even dress up a light fixture with a simple medallion.

2. Wood Floors – Are your wood floors looking a little worse for wear?  Refinish them for a fresher look.  If they are completely worn out, opt for replacing them.

3. Light Fixtures – Are you still using fluorescent lights in the kitchen or bathroom?  Recessed lighting or updated light fixtures can increase the warmth and feel of any room for a reasonable price.

4. Entryway/Foyer – If your entryway/foyer area is stuck in a bygone era, you may want to freshen it up with a fresh coat of paint, newer wallpaper, refinished stairway and/or new flooring.

5. Kitchen Island – Storage is one of the toughest things to accommodate in a kitchen.  Adding a kitchen island with shelves or cabinets included in the design not only increase your storage capacity, but also your surface area.   Try using butcher block or concrete for the kitchen island’s work surface as an alternative to expensive granite or marble.

6. Pantry – Adding a simple pantry to your kitchen can increase your food storage in a small area quickly and easily.

7. Shower – Simply changing the showerheads in your bathrooms can make a dramatic difference.  One of the more popular fixtures is a large pan showerhead that simulates a rainfall.  Also, you may want to consider adding a multi-head or second showerhead in your master bath.

8. Fixtures – Updating the fixtures for your kitchen or bathroom sinks increase the room’s appeal.  In the kitchen, consider adding a pull-out sprayer with a retractable hose to help clean the sink and reach those pots or pans that are too big to sit in the sink under a traditional faucet.  While you’re at it, update the cabinets and drawers with new handles, knobs or pulls.  If your cabinets don’t include any fixtures, the look can be dramatically altered quickly.

9. Porch – Adding a porch creates a more welcome appearance and brings your living space to the outdoors.  You’ll need to make sure to check the building codes in your area first for setback requirements and obtain a building permit, if necessary.

10. Siding – Check your home’s siding for any damage.  If your siding is in good condition, you can find products at your local home supply store to restore the finish to its original condition.  If it’s time to replace, vinyl siding is the most affordable in a variety of colors and styles.  It’s not your parents’ ugly siding anymore.

These are just a few of the simpler ways to get the most bang for your buck in remodeling projects.  I’d love to hear what projects you have done to increase the value of your Hendersonville home.  What you do now will help you when you decide to sell your Western North Carolina home later.

Prepare for Cold Weather in Hendersonville

The National Weather Service’s issuance of snow before 2pm today, rains and further snow after 2pm and winds up to 9 mph, I thought I’d share a few tips on how to prepare for cold weather here in Hendersonville.

1. Make sure your fireplace flue is open and clear.  You want the smoke from the fire to go straight up instead of filling the room and causing a breathing problem.
2. Keep all combustible materials away from any heat source, such as the fireplace, portable heaters and ovens/stoves.  This includes paper, matches, lighters, etc.
3. Don’t use the oven/stove to heat up the room.  They are not meant to be used for long periods of time.  Also, an unattended, open oven/stove runs a high risk of catching your house on fire.
4. Keep an eye on children and paper products near a heating source.  Paper is highly combustible, children can get burned if they get too close and children with blankets can accidentally get too close to an oven/stove, etc. and catch their blanket on fire.
5. Check on your elderly relatives or neighbors.  Make sure they have enough food, water, supplies, etc. and that their heating source works properly.  If they don’t have a reliable source for heat, you may want to check with local government agencies to find out what programs they offer to help.

With the temperatures dropping in Henderson County, it is important to make sure you are prepared for cold weather here in Hendersonville.

Rich Cooke, your Hendersonville real estate expert