Info which helps Buyers and Sellers!

   !New Information effecting FHA and VA Mortgages!:
Effective January 1, 2006, FHA has announced an increase in single-family home mortgage
limits, almost $50,000 more than last year, (2005). The loan limits for two-four unit dwellings also increased. The following are the new loan limits for Chattanooga, Marion County, and surrounding areas:
One-Family       $200,160
Two-Family       $256,248   (This could be of special interest to VETS!)

Return on remodeling in and around your home.
The best guidance comes from remodelers and real-estate professionals who know their neighborhoods and the local market.

Project                    Job Cost         Value at Sale    %Cost Recovered

Siding Replacement        $7,239                  $6,914                       95.5%
Bathroom Remodel        $10,500                    $10,727                     102.2%   
Major Kitchen Remod   $43,865                    $39,920                       91.0%
Roofing Replacement     $16,453                    $14,140                       85.9%
Window Replacement    $16,100                    $14,260                       88.6% 
Deck Addition                 $5,800                       $6,400                     110.3%
  info from: Remodeling Magizine

Decks Can Add Value to Your House at Resale Time

The recreational value of a deck is obvious, but it also can add to the value of your house at resale time.

JUL 05, 2002
Realty Times

The recreational value of a deck is obvious, but it also can add to the value of your house at resale time.

According to the annual Cost vs. Value survey jointly sponsored by Remodeling and Realtor magazines, a typical American homeowner who adds a deck could recoup 75 to 110 percent of the total cost if he or she sold the house within a year of the deck's construction.

The project described in the survey was a 16-by-20-foot deck of pressure-treated pine, supported by 4-by-4 posts set into concrete footings. Include a built-in bench, railings and planter, also of pressure-treated pine. The cost of the project was estimated at $5,865.

Cost and value of decks varied from region to region.

In metropolitan Boston, where a similar deck costs about $7,600 to build, a homeowner can expect to recoup 139 percent of his investment at sale time. On Long Island, where it costs $7,800, the return is 112 percent.

In Westchester County, N.Y., Albany, and Baltimore, the return is only about 50 percent.

If you want to make some real money, move to San Diego. A deck there costs only $6,200, but you recoup 156 percent of your investment - the highest in the United States.

Some suggestions from the real estate agents interviewed in the report: Design the deck as something other than a rectangle. Consider using a laminated safety glass instead of pickets for the railing, so the view is not blocked. Add decorative posts with pre-made copper-topped finials or post caps.

For the greatest financial return, many builders and real estate agents suggest that the deck be designed as an extension of the living space, not an appendage to the house. A deck is high on the wish list of virtually anyone buying a house in the city. Depending on the time of year, one can actually "expand" a home, providing additional living space, with hot tubs, grills and patios, and even outdoor showers.

Very often, city buyers do not care how big that outdoor space is. They may want just a little something for the dog. One thing is certain, though. If the house has no deck , and there is a way of adding one, the city buyer will do it -- especially rooftop decks with great downtown views.

If there is a little something already, it's bound to get bigger.

In the suburbs, a deck often can sell a house, especially in late spring or early summer, as people envision themselves outside and entertaining. New construction was expected to have a deck , but since they are relatively inexpensive to build, it won't break the bank if the buyer has to put one on.

A lot of builders make decks optional. The builders will tell the buyers that they could probably find someone to build it cheaper, and put a couple of boards in front of the French doors to where the deck will be.

Deck maintenance is a big issue with homeowners, and and a lot of buyers opting to install vinyl-coated decking. There also has been major growth in maintenance-free, composite-wood decking such as Trex and other brands in recent years.

How big should your deck be? Most people tend to build their decks too small for furniture and for function. Add a couple more feet than you think you'll need. Every inch will be used.

A lot of houses, especially true Victorians, don't look quite right with a deck - try a patio garden, pergola or porch. But if you think a deck would go well with your house, take a look at what others have built. Then think about appearance and size, determine what you can afford to spend, and obtain estimates.

Every municipality has its own requirements for decks and their builders. In some, builders must be licensed; most are required to be insured. Other towns require that a scale drawing of the deck plan be reviewed by the building inspector. Each contractor should provide a detailed estimate of the project, including a description of the materials, how they will be used, how much the project will cost, and about how long it will take.

The contractor handles all permit and inspection requirements and builds the cost of them into the price. Many provide the required scale drawings once the contract has been signed.

The Remodeling/Realtor 2001 Cost vs. Value report's cost for a typical 16-by-20-foot pressure-treated deck works out to about $18 per square foot for materials and labor. Cedar or redwood decks cost about 45 percent more.
Copyright © 2002 Realty Times. All Rights Reserved.

Tax Info

New Federal Tax Rules Clarify Home Sale Capital Gains Exclusions by Kenneth R. Harney

After nearly three years of uncertainty, the IRS has now delivered the answers to questions that have bedeviled home sellers, Realtors and professional tax advisers. In year-end regulations, the IRS clarified its rules on capital gains exclusions for profits on home sales.

The largest category of people affected are those who sell their homes prior to the standard two-year holding period required for the maximum capital gains exclusions of $250,000 (single filers) and $500,000 (married, joint filers). The standard rules allow sellers to exclude up to those maximum amounts of sale profits provided they have owned and used their property as a principal residence for an aggregate two out of the five years preceding the sale. Any profits beyond the exclusion amounts are taxed at capital gains rates.

For taxpayers who sell after ownership and use of less than two years, Congress created a partial exclusion or shelter back in 1997-1998: You can claim a portion of the maximum exclusion if you sell early because of a change in employment, a change in health, or because of "unforeseen circumstances." For example, a single homeowner who sold his property for a profit after just one year because of a corporte transfer could claim one half of the full $250,000 stamdard exclusion--$125,000.

In the absence of formal regulatory guidance from the IRS interpreting employment change, health change and "unforeseen circumstances," many taxpayers have been reluctant to use the partial exclusion. The IRS itself warned taxpayers not to claim "unforeseen circumstances" on their returns until the agency itself spelled out precisely what circumstances qualify.

Now the IRS has done so with interim rules, opening the door to partial exclusion claims for tax year 2002 and any prior year's returns where a refund may be available under the new rules. (For such situations, taxpayers can file for refunds using Form 1040X.)

On "unforeseen circumstances," the IRS lists seven major categories that create a "safe harbor" that automatically makes the claim eligible:

• Death of the taxpayer, a spouse, a co-owner or any member of the taxpayer's household.
• Divorce or legal separation.
• A job loss that results in eligibility for unemployment compensation.
• A change in employment that leaves the taxpayer unable to pay the mortgage or basic living expenses.
• Multiple births from the same pregnancy;
• Damage to the residence resulting from a natural or man-made disaster, or an act of war or terrorism.
• Condemnation, seizure or other involuntary conversion of the property.

The regulations also give the IRS commissioner the discretion to determine other circumstances that qualify as unforeseeen.

On employment changes that trigger early sales, the IRS rule is straightforward: "A home sale will be considered related to a chane in employment if a qualified person's new place of work is at least 50 miles farther from the old home than the old workplace was from that home. This is the same distance rule that applies for the moving expense deduction. The employment change must occur during the taxpayer's ownership and use of the home as a residence.

The new rules allow a partial exclusion for health if "the primary reason is related to a disease, illness or injury" of the home seller or member of the household. If a physician recommends a change in residence for health reasons, that will be sufficient to claim the exclusion.

Published: December 30, 2002 - From Realty Times - 2002

 Hal Perry